• 


BROOKS' 


FOREIGN  EXCHANGE 


TEXT  BOOK 


AN    ELEMENTARY    TREATISE    ON 


AND  THE  MONETARY  SYSTEMS 
of  THE  WORLD 


FOR  THE  INSTRUCTION  and  USE  of  THE  BANKER,  EXPORTER. 

IMPORTER,  TOURIST  and  PARTICULARLY  FOR 

THE  SCHOLAR  and  STUDENT 


1906 

Revised  September.  1908 

/ 

By  HOWARD  K.  BROOKS 

Author  of  "Foreign  Exchange,"  Figured,  Explained,  Simplified,  Illustrated 


Published  by  H.  K.  BROOKS.  78  Monroe  Street 

CHICAGO,  ILL..  U.  S.  A. 


jr 
^4 


COPYRIGHT  1906 

BY    HOWARD    K.    BROOKS 
CHICAGO,  ILL.,  U.  S.  A. 


INTRODUCTION. 


O  doubt  many  who  have  become  interested 
in  the  science  of  foreign  exchange  are  some- 
what discouraged  as  well  as  surprised  to 
find  so  few  text-books  treating  of  this 
science  which  are  of  value  to  the  beginner. 
The  few  books  obtainable  upon  this  subject 
are  either  too  far  advanced  for  the  student  or  are  of  such  a 
character  as  to  require  too  close  study  to  be  readily  compre- 
hended. While  the  theory  of  foreign  exchange  is  quite 
clearly  defined  in  a  number  of  works  upon  the  subject,  the 
use  of  technical  terms,  the  absence  of  proper  illustrations  or 
the  inability  of  the  writers  to  impart  knowledge  has  made 
it  difficult  for  the  beginner  to  understand  the  various  pro- 
cesses through  which  the  results  were  obtained,  and  as  a 
result  many  students  have  become  discouraged  at  trying  to 
master  what  seemed  to  them  insurmountable  problems,  too 
intricate  to  be  overcome. 

In  presenting  this  publication  the  writer  has  invariably 
kept  in  mind  the  importance  of  explaining,  in  simple 
language,  the  essential  principles  of  the  science  and  where 
there  seemed  any  doubt  of  the  clearness  of  the  statements, 
to  supplement  same  with  complete  illustrations. 

While  practical  experience  is  necessary  in  the  more 
intricate  operations  in  foreign  exchange  transactions,  stu- 
dents and  junior  employes  of  banks  and  mercantile  houses 
should  experience  no  difficulty,  with  well  directed  study 
and  application,  in  fitting  themselves  for  lucrative  positions 
in  the  foreign  departments  of  city  banks  and  mercantile 
institutions.  In  fact  the  writer  b?Ht*e^tkeK>.BDortunity  for 


young  men  in  the  foreign  exchange  departments  of  the  con- 
cerns mentioned,  are  more  encouraging  and  promise  better 
salaries  for  the  future,  than  in  almost  any  other  line  of  trade. 

With  the  very  large  and  rapidly  increasing  export  and 
import  business  between  the  United  States  and  foreign 
countries,  necessitating  large  commercial  money  transactions, 
and  the  large  and  growing  foreign  population  who  are  con- 
stantly sending  remittances  of  money  to  their  friends  and 
relatives  abroad,  to  say  nothing  of  the  enormous  increase 
in  travel  by  Americans  to  foreign  lands,  the  importance  of  a 
general  knowledge  of  foreign  exchange  business  in  its 
various  details  is  becoming  greater  each  year. 

Where  a  few  years  ago  dealings  in  foreign  exchange 
were  confined  to  a  few  leading  banks  and  bankers  at  the 
principal  large  cities,  we  now  find  nearly  every  bank  and 
financial  institution  equipped  for  handling  such  business. 
Merchants  who  formerly  imported  goods  through  brokers 
at  seaport  cities  now  have  foreign  departments  for  conduct- 
;ng  the  business  direct. 

Therefore,  we  urge  young  men  to  devote  time  and 
study  to  this  branch,  believing  it  will  insure  to  them  a  higher 
appreciation  and  ultimately  a  greater  remuneration  than  is 
afforded  in  other  classes  of  financial  and  mercantile  pursuits. 


CHICAGO,  ILL.,  U.  S.  A. 


CONTENTS. 

PAGES. 

CHAPTER  I.  Foreign  Exchange.  Meaning  of  the  term — Class 
of  transactions — Extent  of  the  business — Trade  between 
countries — Exchange  Centres — Exchanging  of  the  money 
— MargrafT's  Explanation 1-  4 

CHAPTER  II.     Monetary  Systems  of  the  World 5 

Paper    Money — Gold — Silver   and    Minor    Coins — Value    of 

foreign  money 5-     7 

Money  of  European  Countries 7-  31 

Money  of  Asiatic  Countries 32-  42 

Money  of  African  Countries 43-  46 

Money  of  Islands  of  the  Pacific  Ocean 46 

Money  of  North  American  Countries 47-  52 

Money  of  Central  American  Countries 52-  55 

Money  of  West  Indies  Islands 55-  59 

Money  of  South  American  Countries 59-  68 

Meaning  of  16  to  1,  in  coinage 69 

Standard  Bullion 69 

Seigniorage 70 

Coinage  of  gold 70 

Adoption  of  gold  standard 71 

The  term  "Ratio" 71 

Monetary  units  of  principal  countries,  value,  etc 72-  73 

CHAPTER  III.     Conversion  of  foreign  money  into  United  States 

money  and  vice  versa 75 

English  Exchange 75-  80 

French,  Belgian  and  Swiss  Exchange 81-  85 

German  Exchange 85-  91 

Scandinavian  Exchange 92 

Russian  Exchange,  Austria-Hungarian  Exchange 93 

Holland  Exchange 94-  95 

Italian  Exchange 96-  97 

Chinese  and  Hong  Kong  Exchange 98 

Japanese  Exchange — Mexican  Exchange 99 

Philippine  Islands  Exchange .- 100-101 

India  (British)  Exchange TTTTTTT 101-102 

Brazilian  Exchange 102- 105 

Portuguese  "Exchange 105 

Bulgarian  Exchange — Roumanian  Exchange 106 

Spanish  Exchange 107-108 

Servian  Exchange — Finnish  Exchange 108-109 

Grecian  Exchange — Turkish  Exchange 110-111 

South  American  Exchange Ill 


CONTEXTS 

CHAPTER  IV.     Quotations  for  Foreign  Exchange 1 13 

Methods  of  quoting , 113-116 

Newspaper  quotations 116-120 

CHAPTER  V.     Rate  of  Exchange 121 

Fixed,  Fluctuating,  Posted,  Actual,  Rising  or  Falling 121-122 

CHAPTER  VI.     Causes  of  fluctuation  in  Rates  of  Exchange 123-125 

CHAPTER  VII.     Pars  of  Exchange 127-130 

Pars  of  Exchange  between  Great  Britain  and  other  countries         131 
Commercial  Par  of  Exchange 132-133 

CHAPTER  VIII.     Arbitration  of  Exchange 135-138 

CHAPTER  IX.     Foreign  Commercial  Forms 139 

Circular  Letter  of  Credit 139-146 

Letter  of  Indication 147-149 

Foreign  Drafts  and  Checks 150-152 

Travelers'  Cheques 153-156 

Cable  Transfers  of  Money  to  Foreign  Countries 157 

Foreign  Postal  Remittances 158-161 

Limited  Foreign  Checks 162 

Foreign  Pos    "  Money  Order 163-165 

Foreign  Com    ercial  Bill  of  Exchange 166-172 

Commercial  Letter  of  Credit 173-177 

CHAPTER  X.     Terms  and  Expressions 179-187 

,  Indorsements 187-188 

CHAPTER  XI.     Buying  Foreign  Commercial  Bills  of  Exchange  ...  189-194 

Buying  Bills  of  Exchange  on  Great  Britain 194-199 

Buying  Bills  of  Exchange  on  France 199-203 

Buying  Bills  of  Exchange  on  Germany 203-206 

Buying  Bills  of  Exchange  on  Holland 206-209 

Hypothecation  Certificate 210 

APPENDIX. 

The  Use  of  the  Cable  in  Foreign  Exchange  Transactions 212-213 

Foreign  Exchange  Brokers 214 

Jobbers  of  Foreign  Exchange 215-217 

Express  Money  Orders 218 

Foreign  Exchange  Retailers'  Guide  to  Profit 219 

Foreign  Exchange  Retailers'  Guide  to  Profit  (English  Money) ...          220 
The  Travelers'  Guide — Value  of  gold  and    silver  coins  in  money 

of  other  countries 221-223 

Fractions  of  100  by  64ths,  expressed  decimally 224 

The  Aim  of  the  Author 225 

Index..  ..226-239 


CHAPTER  I. 

FOREIGN  EXCHANGE, 

The  term  "Foreign  Exchange"  is  one  commonly  used  to 
apply  to  financial  transactions  between  countries,  the  word 
''foreign"  implying  a  foreign  country,  "exchange"  meaning  to 
barter  or  to  give  one  thing  for  another. 

The  dictionary  gives  several  definitions  of  the  word  "ex- 
change," applicable  to  the  term  "Foreign  Exchange;"  for  example: 
"to  part  with  in  return  for  some  equivalent;  to  exchange  in 
foreign  countries  for  gold;  the  act  of  giving  one  thing  or  com- 
modity for  another;  the  process  of  exchanging  one  debt  for 
another,  or  the  receiving  or  paying  of  money  in  one  place  for  an 
equal  sum  in  another  place  by  order,  draft,  or  bill  of  exchange." 

Exchange  in  its  broad  sense  covers  all  exchanges  of  com- 
modities, but  the  term  "Foreign  Exchange"  is  limited  to  tran- 
sactions between  countries  in  the  monetary  settlements  of  such 
exchanges  of  commodities  or  of  corporal  interests. 

Foreign  Exchange  is  a  system  by  which  commercial 
nations  discharge  their  debts  to  each  other.  These  debts,  which 
represent  the  difference  between  the  amount  we  owe  to  foreign 
countries  and  that  which  they  owe  us,  have  to  be  paid  either 
with  cash  or  something  equally  satisfactory  to  creditors.  The 
transmitting  of  gold  and  currency,  while  sometimes  resorted 
to,  is  usually  regarded  an  expensive  and  risky  method;  therefore, 
to  avoid  this  risk  and  expense,  the  system  of  exchanging  debts 
through  the  medium  of  commercial  paper  is  adopted,  and  the 
process  of  so  doing  is  termed  "Foreign  Exchange  business." 

Among  the  various  transactions  which  may  properly  be 
termed  Foreign  Exchange  are  the  following:  The  issuing 
of  a  money  order,  draft,  check,  or  bill  of  exchange  payable  in  a 
foreign  country;  the  shipping  of  currency  or  coin  from  one  country 
to  another;  an  order,  either  written  or  cabled  (telegraphed),  to 
have  a  certain  sum  of  money  paid  in  a  foreign  country;  a  draft 
payable  in  a  foreign  country  drawn  for  the  value  of  goods  ex- 
ported; a  draft,  money  order,  check  or  bill  of  exchange  drawn  in 
a  foreign  country  payable  in  this  country;  the  buying  or  selling 
of  foreign  currency  or  coin,  whether  here  or  abroad;  a  circular 
letter  of  credit,  commercial  or  mercantile  letter  of  credit,  circular 


2  FOREIGN  EXCHANGE  TEXT  BOOK 

note,  travelers'  cheque,  or  other  forms  used  either  for  obtaining 
money  or  credit  in  a  foreign  country. 

To  have  a  clear  understanding  of  what  foreign  exchange 
business  is  and  how  it  is  conducted,  one  should  know  the  various 
sources  from  which  foreign  exchange  transactions  emanate. 
Our  exports  and  imports  of  commercial  products  and  manufactured 
articles  furnish  the  greatest  volume  of  the  transactions,  and 
serve  to  illustrate  the  enormous  extent  of  the  business.  By 
referring  to  statistics  compiled  by  the  United  States  Government 
we  find  that  during  the  year  1905,  the  value  of  merchandise 
imported  into  the  United  States  from  foreign  countries  amounted 
to  $1,179,358,846.00,  and  that  the  value  of  the  merchandise 
exported  from  the  United  States  to  foreign  countries  for  the 
same  period  reached  the  sum  of  $1,626,962,343.00,  making  the 
total  value  of  goods  exported  and  imported  $2,806,321,189.00, 
and  the  difference  between  the  value  of  importations  and  expor- 
tations,  representing  the  balance  of  trade  in  our  favor,  or  balance 
due  us  thereon  from  foreign  countries,  the  sum  of  $447,603,497.00. 
These  figures,  however,  fall  far  short  of  representing  the  total 
volume  of  business,  for  the  period  named,  between  this  and  foreign 
countries  which  was  handled  through  the  medium  of  the  system 
we  call  "Foreign  Exchange."  The  investments  made  by  people 
in  this  and  foreign  countries  in  each  other's  stocks,  bonds  and 
enterprises  of  various  kinds,  and  the  interest  and  dividends 
resulting  from  same;  the  cost  for  transportation  of  goods  and 
the  commissions  paid  for  services;  the  expense  incurred  for 
travel  in  foreign  countries  on  business  or  pleasure;  money  bor- 
rowed or  loaned  to  float  large  enterprises;  remittances  to  relatives 
and  friends,  and  the  many  other  sources  from  which  foreign 
exchange  transactions  are  made  up  and  which  are  not  included 
in  the  above  figures,  amount  in  the  aggregate  to  a  sum  so 
large  as  to  seem  almost  incomprehensible,  and  for  anyone  to 
form  anything  like  a  correct  estimate  of  same  would  be  very 
difficult,  if  not  impossible. 

The  exporters  are  very  little  interested  in  this  balance. 
When  goods  are  shipped  abroad,  the  exporter  is  at  once  reimbursed 
for  them  by  selling  his  foreign  commercial  bills  of  exchange  against 
such  shipments  to  bankers  and  foreign  exchange  dealers.  The 
latter  in  return  are  reimbursed  through  the  payment  of  the  bills 
at  maturity  and  each  export  transaction  terminates  by  the 
amount  being  placed  to  the  credit  of  the  purchasers  of  the  bills. 
Against  this  credit  the  banker  or  dealer  sells  his  own  checks, 
circular  letters  of  credit,  commercial  letters  of  credit,  bills  of 
exchange,  etc.,  to  importers  or  others  wishing  to  remit  or  obtain 
credit  abroad,  which  largely  offsets  the  balance  in  our  favor  and 
any  remaining  balance  does  not  stay  long  abroad  unless  it  can 
be  more  profitably  invested  there  than  here.  The  return  from 


FOREIGN  EXCHANGE  3 

abroad  of  American  securities  also  offsets  merchandise  balances. 

Trade  between  countries  may  be  said  to  be  conducted  in  a 
manner  quite  similar  to  that  employed  between  cities  and  towns 
in  this  country,  except  that  the  method  of  payment  or  reim- 
bursement to  the  shipper  necessarily  differs,  by  reason  of  the 
greater  distance,  the  difference  in  kind  of  money  used,  and  the 
different  commercial  customs.  To  obtain  payment  for  goods 
shipped  to  a  foreign  country  which  perhaps  would  not  arrive  at 
destination  for  several  weeks,  and  possibly  months,  according  to 
distance  or  whether  shipped  by  fast  or  slow  steamers,  to  say 
nothing  of  the  fact  that  for  some  countries  steamers  leave  our 
ports  only  semi-monthly  or  monthly,  it  is  the  usual  custom  of  the 
shipper,  whom  we  term  the  "exporter,"  to  sell  his  commercial  bill 
of  exchange  against  the  shipment  in  advance  to  the  highest  bidder, 
ani  he  rarely  experiences  any  difficulty  in  finding  a  ready  pur- 
chaser. 

Our  exporters,  in  competing  with  foreign  manufacturers, 
must  take  into  consideration  the  cost  of  transportation,  insurance 
on  goods,  custom  duties,  commissions  for  services,  difference  in 
value  of  money  and  the  probable  price  at  which  they  can  discount 
or  sell  their  commercial  bill  (draft  and  documents)  against  same. 
Time  credit  must  also  be  extended  to  the  buyer.  If  our  exporters 
had  to  wait  for  payment  until  maturity  of  their  drafts,  it  would 
mean  the-  tying  up  of  a  large  amount  of  capital  and  possibly 
prevent  their  competing  successfully. 

The  payment  of  indebtedness  between  countries  representing 
innumerable  transactions  is  adjusted  through  a  very  few  centers, 
or  as  we  might  sav,  "Clearing  Houses/'  and  corresponds  to  the 
practice  in  vogue  in  this  country,  except  that  instead  of  being 
adjusted  or  settled  daily  as  is  done  through  our  bank  Clearing 
Houses,  the  balances  are  never  brought  to  a  final  settlement,  but 
continue  from  year  to  year,  adjusting  themselves  from  time  to 
time  as  they  mature.  While  the  exact  balances  between  countries 
are  never  known,  the  volume  of  same  is  shown  in  the  movements 
of  the  "rates  of  exchange"  above  and  below  "par"  between 
countries. 

New  York  is  the  exchange  centre  or  clearing  house  of  North 
America,  and  to  a  large  extent  of  South  and  Central  Americas. 
London  is  the  exchange  centre  of  the  British  Empire  and  partly 
of  the  entire  world;  Paris  of  France,  Belgium,  Switzerland,  Italy, 
Spain,  Bulgaria,  Roumania  and  Greece;  Berlin  and  Hamburg  of 
Germany,  and  to  some  extent  of  Russia;  Vienna  of  Austria 
Hungary;  Stockholm  of  Sweden,  Norway  and  Denmark;  Hong 
Kong  of  China  and  largely  of  other  oriental  countries;  Yokohama 
of  Japan,  and  Manila  of  the  Philippine  Islands. 

Any  material  excess  over  the  usual  indebtedness  between 
two  countries  is  instantly  reflected  in  the  rise  or  fall  of  the  rates 
of  exchange  between  those  countries,  caused  by  the  increased 


4  FOREIGN  EXCHANGE  TEXT  BOOK 

or  decreased  demand  for  exchange,  and  no  sooner  do  these  changes 
in  rates  become  known  than  operations  are  entered  into  which 
cause  the  rates  to  reach  normal  conditions  or  nearly  so. 

The  exchanging  of  the  money  of  one  country  into  that  of 
another  country,  whether  by  the  exchange  of  the  currency  or 
coin  itself  or  by  means  of  commercial  paper,  as  a  rule,  results  in 
loss  to  the  owner  and  gain  to  the  purchaser,  since  each  one  re- 
ceiving the  money  or  paper  converts  it  at  a  rate  of  exchange 
favorable  to  themselves.  For  example:  If  the  holder  of  a 
"Letter  of  Credit"  drawn  in  English  money  (pounds  sterling) 
presents  same  at  a  bank  in  Germamr,  it  is  customary  to  ask  for 
and  receive  not  English  money,  but  the  equivalent  of  same  in 
German  money  (marks),  and  in  converting  same  the  German 
banker  will  do  so  at  a  rate  of  exchange  that  will  enable  him  to 
make  a  profit  on  the  transaction,  and  he  does  so  by  determining 
the  number  of  marks  for  which  he  can  sell  a  pound  sterling  and 
then  pays  a  less  number  to  the  holder  of  the  letter  of  credit 
for  his  draft.  This  method  of  converting  money  is  practiced 
by  banks  and  other  financial  institutions  in  this  country,  as  well 
as  abroad.  For  instance,  if  a  holder  of  a  draft  or  check,  payable 
suy  in  London,  offers  same  for  sale  or  presents  it  to  be  cashed  at 
a  bank  in  this  country,  the  banker  will  first  determine  the  rate  at 
which  exchange  on  London  can  be  sold,  and  will  then  offer 
such  lower  rate  as  will  afford  a  profit  in  the  use  of  the  draft  or 
check  purchased  by  sending  same  to  London  for  credit  or  reselling 
same  to  a  banker  having  a  London  account. 

If  every  country  of  the  world  used  money  of  exactly  the 
same  denominations  and  value,  even  though  called  by  different 
names,  the  exchanging  of  debts  or  the  remitting  of  money  between 
countries  would  be  a  very  simple  matter,  just  as  simple  as  it  is  to 
exchange  debts  or  to  remit  money  to  places  within  the  United 
States.  Owing  to  the  different  monetary  and  financial  conditions, 
nearly  every  country  now  has  a  monetary  system  differing  in 
some  respects  from  that  of  other  countries. 

Murgraff  in  "International  Exchange,"  says:  "In  its  tangible 
shape  Foreign  Exchange  is  an  evidence  of  indebtedness  represented 
by  a  negotiable  instrument,  the  drawer  or  maker  constituting  the 
creditor,  the  drawee  the  debtor,  and  title  thereto  is  vested  in  the 
payee." 

"The  indebtedness  underlying  foreign  bills  of  exchange  is 
created  in  various  ways;  it  may  be  issued  against  the  value  of 
merchandise  exported,  securities,  or  actual  funds.  The  major 
portion  of  foreign  bills  of  exchange,  however,  are  drawn  against 
exports  of  commodities." 

Foreign  exchange  transactions  are  generally  regarded  as 
being  very  complicated,  but  while  there  are  some  operations 
requiring  experience  and  patient  study,  the  system  as  a  whole 
cannot  be  said  to  be  any  more  intricate  than  many  of  the  problems 
dailv  arising  in  local  mercantile  business. 


CHAPTER  II. 

THE 

MONETARY  SYSTEMS  OF  THE  WORLD. 

A  knowledge  of  the  money  of  account  or  monetary  systems 
of  the  various  countries  of  the  world  is  one  of  the  first  things 
necessary  to  a  clear  understanding  of  foreign  exchange  transac- 
tions. 

There  are  various  forms  of  money  employed  by  the  several 
nations  of  the  world  to  effect  their  exchanges.  These  forms  may. 
however,  be  generally  classified  as  follows: 

Government  notes. 

Bank  notes.  » 

Certificates  of  deposit  for  gold  or  silver. 

Gold  coin  or  bars. 

Full  legal  tender  silver. 

Subsidiary  silver  coins  having  limited  legal  tender. 

Minor  coins,  i.  e.,  base  metal  tokens. 

The  most  important  attribute  of  any  form  of  money  is  its 
legal  tender  power;  that  is,  the  power  conferred  by  law  to  dis- 
charge a  debt  payable  in  money.  While  all  forms  of  money  have 
in  some  countries  a  greater  or  less  legal  tender  power,  gold  alone 
possesses  an  unlimited  legal  tender  power  throughout  the  world. 

Paper  Money. 

Government  notes  are  issued  by  comparatively  few  countries. 
Bank  notes  are  issued  in  nearly  all  civilized  countries.  Gold 
and  silver  certificates  represent  actual  deposits  of  coin  or  bullion, 
and  some  issues  of  notes  are  similarly  covered  by  metallic  (gold 
or  silver)  money.  Government  and  bank  notes  are  generally 
issued  to  a  greater  or  less  degree  on  the  credit  of  the  government 
or  bank  issuing  them  and  are  exchangeable  for  coin  in  accordance 
with  the  measure  of  that  credit. 

Paper  money,  such  as  government  and  bank  notes  and 
certificates,  are,  as  a  -rule,  intended  solely  for  circulation  within 
the  country  in  which  issued  and  are  not  legal  tender  outside  of 
the  country  from  which  they  emanate.  Of  course,  paper  money  is 
often  accepted  in  small  amounts  for  its  full  face  value  in  other 
countries,  but  it  is  always  optional  with  the  creditor  as  to  its 
acceptance. 

Gold. 

By  virtue  of  the  commercial  usage  and  the  laws  of  the  various 
countries  of  the  world,  gold  may  be  said  to  be  the  only  international 
money,  and  its  purchasing  power  is  practically  the  same  throughout 
the  civilized  world.  But  bear  in  mind,  the  value  of  gold  coins 


6  FOREIGN  EXCHANGE  TEXT  BOOK 

is  not  always  as  expressed  on  their  face.  In  large  international 
transactions  the  weight  of  the  same  is  regarded  and  not  the 
number  of  pieces;  and  their  value  depends  upon  their  weight  and 
fineness.  By  fineness  is  meant  the  proportion  of  pure  metal. ' 

[Nearly  all  coins  contain  alloy,  or  inferior  metal,  which  is  added 
to  increase  their  durability. 

The  value  or  price  of  the  gold  money  of  account  of  commercial 
countries  is  determined  by  the  weight  and  fineness  of  the  metal 
contained  therein,  which  weight  and  fineness  are  established  by 
the  mint  laws  of  the  country  issuing  the  money.  It  is  therefore 
essential  that  the  standard  of  weight  by  which  the  various  moneys 
of  account  are  established  shall  be  unvarying  and  have  the  highest 
legal  sanction;  otherwise  there  would  be  no  stability  of  values 
and  no  such  thing  as  accurate  deductions  of  pars  of  exchange. 

I  Gold  js  the  only  commodity  in  the  world  the  value  of  which  is 
established  by  law. 

The  price  of  gold  in  the  United  States  cannot  be  affected 
by  an  abundance  or  a  scarcity  of  supply.  Our  mints  will  buy 
it  at  the  price  established  by  law,  and  although  there  is  no  inter- 
national agreement  to  maintain  the  price,  the  fact  that  gold  is 
accepted  by  the  chief  commercial  countries  at  the  one  universal 
measure  of  values  operates  to  prevent  any  attempt  to  materially 
change  its  value.  The  price  of  diamonds,  which  are  more  valuable 
than  gold,  is  affected  by  the  supply  or  demand.  Silver,  used 
extensively  as  money,  fluctuates  in  price  like  any  commodity, 
the  supply  and  demand  governing  its  value. 

Silver  and  Minor  Coins 

are  also  intended  for  domestic  use,  and  when  accepted  in  other 
countries  it  is  at  their  actual  metal  value  rather  than  at  their  face 
value.  For  illustration :  The  purchasing  power  of  the  silver  dollar 
of  the  United  States  within  this  country,  is  as  great  for  small  sums 
as  the  gold  dollar,  but  in  the  other  countries  it  would  be  accepted 
only  for  its  bullion  value. 

Value  of  Foreign  Money. 

Once  each  three  months  the  Director  of  the  United  States 
mint  proclaims  by  Circular  the  value  of  foreign  coins  in  terms 
of  the  money  of  account  of  the  United  States  for  the  purpose  of 
establishing  uniformity  in  the  calculations  of  duties  upon  im- 
portations of  merchandise  entered  at  the  various  custom  houses. 
The  valuations  of  gold  moneys  of  account  rarely  ever  change, 
because  the  weight  and  fineness  of  the  gold  coins  are  fixed  by 
the  laws  of  the  countries  issuing  same,  but  the  values  of  silver 
moneys  of  account  fluctuate  frequently  for  the  reason  the  market 
price  for  silver  is  constantly  changing.  The  coins  of  silver- 
standard  countries  are  valued  by  their  pure  silver  contents  at 


che  average  market  price  of  silver  for  the  three  months  preceding  • 
the  date  of  issuance  of  the  circular  by  the  Treasury  Department  at 
Washington. 

In  expressing  the  value  of  paper  money  and  gold,  silver  and 
minor  coins  in  use  in  the  various  countries  named  in  this  chapter, 
we  have  estimated  same  based  upon  the  actual  value  of  the  gold 
unit,  therefore,  while  the  values  as  given  for  gold  coins  may  be 
considered  nearly  accurate,  those  for  paper  notes  and  silver  and 
minor  coins  are  not,  but  are  merely  an  estimate  of  their  home 
value,  based  upon  the  actual  value  of  their  gold  coins,  if  any,  and 
are  given  for  comparative  purposes  only. 


EUROPEAN  COUNTRIES. 
Money  of  Great  Britain  and  Colonies. 

Foremost  among  all  nations  of  the  earth  in  the  magnitude  ol 
its  commerce,  its  vast  colonial  possessions  and  dependencies,  and 
consequently  its  importance  as  the  chief  financial  center,  Great 
Britain  furnishes  the  most  interesting  study  of  the  money  of  the 
world.  Without  exception  the  sovereign  is  the  most  universally 
recognized  coin,  and  is  one  of  the  largest  of  units  of  money. 
Probably  more  foreign  exchange  is  drawn  in  sterling  here  and  in 
other  countries  than  in  the  moneys  of  all  other  countries  combined. 
This  is  due,  however,  to  the  fact  that  London  is  the  financial 
center  of  the  world,  and  exchange  on  that  city  is  generally 
acceptable,  if  not  preferred.  For  the  same  reason  probably 
ninety  per  cent  of  all  letters  of  credit  issued  throughout  the 
world  are  drawn  in  English  money. 

The  currency  of  the  country  is  gold,  with  subsidiary  coins 
of  silver  and  bronze,  supplemented  by  a  convertible  currency. 

Monetary  Unit: 

Sovereign  or  Pound   =20  Shillings 

12  Pence  =  1  Shilling 

4  Farthings  =  1  Penny 

Table: 

4  farthings  (expressed  "far.")=l  penny  £     s.        d.     far. 

12  pence         (expressed  "d.")  =1  shilling  1=20=240=960 

20  shillings    (expressed  "s.")     =1  pound  1=  12=  48 

21  shillings                                     =1  guinea  1=     4 

Table  of  Weights  of  Money. 

24  grains  =1  pennyweight 

20  penny  weight  =  1  ounce 
12  ounces  =1  pound 


8  FOREIGN  EXCHANGE  TEXT  BOOK 

The  value  of  the  gold  sovereign  or  pound  in  the  money 
of  the  United  States  is  $4.8665.  The  nominal  value  of  the  shilling 
is  24k  cents  and  of  the  penny  2*6  cents.  The  commercial  value 
of  the  pound  sterling  in  the  United  States  fluctuates  according 
to  the  demand  for  checks,  drafts  or  bills  of  exchange  on  England 
and  the  supply  of  such  exchange  in  the  market  for  sale.  The 
paper  currency  and  the  gold,  silver  and  minor  coins  in  use,  with 
the  weight,  fineness,  etc.,  and  approximate  equivalent  value  in 
United  States  money  are  as  follows: 

PAPER  MONEY. 

Bank  of  England  Notes— £5  ($24.33),  £10  ($48.67),  £20 
($97.33),  £50  ($243.33),  £100  ($486.65),  £200  ($973.30),  £500 
($2433.25),  £1,000  ($4866.50). 

Irish    Bank    Notes— £1   ($4.87),    £3  ($14.60),  £5    ($24.33), 

£10  ($48.67),  £20  ($97.33),  £50  ($243.33),  £100  ($486.65).  These 

Irish  Bank  Notes    are  issued    by  several  banks  of   Ireland,  and 

\vhile  they  circulate  freely  in  Ireland,  are  subject  to  discount  of 

-', ,  1  penny  per  pound  in  London  transactions  between  banks. 

Scotch  Bank  Notes  of  denominations  of  £1,  £5,  £10,  £20 
and  £100  circulate  freely  in  Scotland,  but  are  subject  to  discount 
of  1  penny  per  pound  in  London  between  banks.  There  are 
quite  a  large  number  of  banks  in  England  that  issue  notes,  but 
they  are  subject  to  charges  for  collection  in  London,  their  circula- 
tion being  purely  local. 

Prior  to  1798,  the  double  standard  (gold  and  silver)  pre- 
vailed with  the  legal  ratio  (a)  of  gold  to  silver  of  1  to  15.21. 
In  1798  an  act  was  passed  prohibiting  the  coinage  of  silver,  anc 
although  it  was  intended  this  measure  should  be  provisional  only 
it  soon  became  permanent,  and  England,  to  all  intents  ana 
purposes,  has  had  the  single  gold  standard  since  1798.  The  single 
gold  standard  was  definitely  adopted  by  virtue  of  the  act  of 
Parliament  passed  June  22,  1816.  The  present  legal  ratio  between 
gold  and  silver  in  the  coinage  of  Great  Britain  is  as  1  to  14.28781. 

The  English  colonies  of  Malta,  Gibraltar,  the  Cape  of  Good 
Hope,  Natal,  the  Australian  colonies,  and  New  Zealand  have  the 
same  monetary  system  as  in  England.  In  Canada,  however,  the 
gold  dollar  of  the  United  States  is  the  monetary  unit  and  the 
pound  sterling  or  sovereign  is  a  legal  tender  at  the  rate  of  $4.866 
per  pound. 

GOLD  COINS.  ^        Value  in 

Gross  Weight          Fineness  Pure  Gold        ,     United  States 

Denominations  (Grains)  (Thousandths)  (t.  rains)  Money 

5  pounds                       616.3723              916i              565.0079^        S24.3328 
2  pounds                       246.5489      ...    9161              226. 0031  -cy  9.7331 

Sovereign                      123.2744      '*C    916s               113. 0015 f-  4.8665 

Half  Sovereign              61.6372              9l6if                56.5007  2.4332 

The  5  and  2  pound  pieces  consist  of  the  Special  Jubilee  issue  in  1887, 
and  the  Special  Coronation  issue  in  1902. 

(a)  See  explanation  of  term  "ratio.'' 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


SILVER  COINS. 

Gross  Weight 
Denominations  (Grains) 

Crown    (5  Shil.)  436.3637 
Half  Crown  (2J  Shil.)    218. 1818 

Florin  (2  Shil.)  174.5455 

Shilling  87.2727 

Six  Pence  43.6363 

Four  Pence  29.0909 

Three  Pence  21.8181 

Two  Pence  14.5454 

Penny  7.2727 

The  four-penny  piece  has  been  withdrawn,  but  is  still  accepted  as 
three-pence.  The  silver  one-penny  and  two-penny  pieces  are  called 
"Mourdy"  money,  being  distributed  as  Royal  Alms  on  Mourday  Thurs- 
day (the  day  preceding  Good  Friday).  They  are  only  souvenir  coins  and 
are  not  in  general  circulation. 


Value  in 
Fineness            Pure  Silver       United  States 
tThousandths)           (Grains)               Money 

925 

403.6364 

$1.2166 

925 

201.8182 

.6083 

925 

161.4545 

4866 

925 

80.7272 

.2433 

925 

40.3636 

.  1216 

925 

26.9090 

.0811 

925 

20.  1818 

.0608 

925 

13.4545 

.0405 

925 

6.7272 

.0202 

Denominations 
1  Penny 
Halfpenny 
Farthing 


MINOR  COINS. 
Weight 
(Grains)  Composition 

145.8333  (  95%  Copper 

87.  5000  \     4%  Tin 
43.7500  (     1%  Zinc 


Legal  Tender 

i  To  the  amount 
J    of  1  Shilling. 


Value 
$0.0202 
.0101 
.0050 


The  sovereign  is  not  a  legal  tender  when  its  weight  is  below 
112.2921  troy  grains  pure  gold.  The  Bank  of  England  does  not 
re-issue  a  sovereign  when  it  is  below  the  weight  of  122.5  troy 
grains  of  gold  and  alloy.  Any  one  presenting  Bank  of  England 
notes  at  the  Bank  of  England  can  obtain  gold  coins  of  legal  weight 
in  exchange  for  the  same  without  question,  delay  or  expense. 

The  British  possessions  where  English  gold  is  unlimited 
legal-  tender  are  as  follows:  Antigua,  Ascension,  Australasia, 
Bahama  Islands,  British  Guiana,  Basutoland,  Bechuanaland, 
Canada,  Channel  Islands,  Cape  of  Good  Hope,  Cypress,  Dominica, 
Fiji  Islands,  Gambia,  Gold  Coast,  Grenada,  Jamaica,  Lagas,  Malta, 
Montserrat,  Natal,  New  Guinea,  Nevix,  Sierre  Leone,  St.  Lucia, 
St.  Helena,  Tobago,  Trinidad,  Transvaal,  Tristan  Da  Cunha, 
Virgin  Islands  and  Turks  Islands. 


Straits  Settlements,  Labuan  and  Hong  Kong. 

The  monetary  system  established  in  Hong  Kong  and  Labuan 
by  order  in  council  regulating  the  currency  February  2,  1895, 
adopted  the  Mexican  silver  dollar  (or  peso)  of  the  standard  weight 
and  millesimal  fineness  of  417.74  grains,  902.7  thousandths  fine, 
to  be  the  standard  coins  of  the  colonies  of  Hong  Kong  and  Labuan. 
The  British  dollar  and  Hong  Kong  dollar  to  be  treated  as  equal 
to  the  standard  coin.  The  dollar  is  a  legal  tender  for  the  pay- 
ment of  any  amount.  The  subsidiary  silver  coins  are  limited  to 
the  amount  of  two  dollars  in  payments. 


10 


FOREIGN  EXCHANGE  TEXT  BOOK 


The  Straits  Settlements  coinage  order  of  1903  authorized 
the  issuance  of  a  silver  dollar  weighing  416  grains,  900  thousandths 
fine.  By  proclamation  of  the  governor  of  the  Straits  Settlements, 
dated  August  24th,  1904,  the  Mexican,  British  and  Hong  Kong 
Dollars  are  demonetized  and  the  new  coin  is  the  only  legal  tender 
dollar  in  the  Straits  Settlements. 


SILVER  COINS,  HONG  KONG  AND  LABUAN. 


Denominations 
British  Dollar 
Half  Dollar 
Twenty  Cents 
Ten  Cents 
Five  Cents 


Weight              Fineness               Pure  Silver 
(Grains)         (Thousandths)            (Grains) 

Value  in 
United  states 
Money 

416.0000 

900 

374.4000  ] 

Estimated 

209.5200 
83.8088      • 

800 
800 

167.6160 
67.0464 

|    quarterly  by 
[•     director  of 

41.9044 

800 

33.5232 

1  United  States 

20.9520 

800 

16.7616 

Mint, 

LATIN  UNION  COUNTRIES. 
(France,  Belgium,  Switzerland,  Greece  and  Italy.) 

Money  of  France. 
Unit:     Franc=100  Centimes 
Table  of  Weights  of  Money. 

1  gram,or 15. 43234  troy  grains 

10  grams=l  dekagram,  or 154.  3235  troy  grains 

10  dekagrams=l  hektogram,  or 1543.  2348  troy  grains 

10  hectograms=l  kilogram,  or 15432.  3487  troy  grains 

The  actual  value  of  the  French  gold  franc  in  the  money  of 
the  United  States  as  declared  by  the  director  of  the  United 
States  mint  is  19  and  3-10ths  cents  ($0.193).  Francs  are  the 
currency  of  the  countries  forming  the  Latin  Union,  a  union 
formed  for  the  adoption  of  a  uniform  monetary  system,  comprising 
France,  Belgium,  Switzerland,  Greece,  and  Italy.  France, 
Belgium  and  Switzerland  call  their  unit  the  "franc."  Greece 
calls  its  unit  the  "drachma",  and  Italy  the  "lire."  The  free 
circulation  of  gold  and  silver  coins  issued  by  the  countries  named 
was  further  ratified  at  the  convention  held  at  Paris,  France, 
November  15th,  1893.  By  this  convention,  ratifying  the  original 
arrangement,  the  gold  and  silver  coins  issued  by  each  of  the  above 
mentioned  countries  were  granted  free  and  unlimited  circulation 
at  face  value  in  the  countries  forming  the  Latin  Union.  The 
Italian  silver  coins  of  less  than  5  lire  were,  however,  excluded  from 
this  arrangement,  as  were  also  copper  coins  and  paper  money, 
which  latter  are  subject  to  a  slight  discount  when  exchanged  in  a 
country  other  than  that  of  issue.  Austrian  and  Russian  gold 
pieces  are  current  in  France.  The  gold  20  and  10  lei  pieces  of 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  11 

Roum&nia,  the  gold  10  and  20  lew  pieces  of  Bulgaria,  the  gold 
10  and  20  dinar  pieces  of  Servia,  and  the  gold  10  and  20  peseta 
pieces  of  Spain,  being  of  the  same  size,  weight  and  fineness,  pass 
current  in  the  Latin  Union  countries,  but  the  silver  coins  do  not. 

Tourists  should  carefully  examine  silver  change  offered  by 
cabmen  and  others,  and  reject  French  coins  below  the  value  of 
5  francs  minted  prior  to  1863  and  Spanish  South  American  and 
Papal  silver  coins  regardless  of  denomination. 

The  commercial  value  of  the  franc  in  the  United  States 
fluctuates  according  to  the  demand  for  checks,  drafts  and  bills 
of  exchange  and  the  supply  of  such  exchange  in  the  market  for 
sale. 

The  paper  currency  and  the  gold,  silver  and  minor  coins  in 
circulation  in  France,  with  the  weight,  fineness,  etc.,  and  their 
approximate  equivalents  in  United  States  money,  are  as  follows: 

PAPER  MONEY. 

BANK  OF  FRANCE  NOTES:  50  Francs  ($9.65),  100  Francs  $19.  30), 
500  Francs  ($96.50),  1000  Francs  ($193.00).  The  old  black  and  white 
notes,  now  withdrawn,  are  still  redeemable  and  are  of  denominations 
as  follows:  5  Francs  ($0.97),  20  Francs  ($3.86),  25  Francs  ($4.83),  200 
Francs  ($38.60),  500  Francs  ($96.50). 

GOLD  COINS. 

Gross  Wfiijrh 

Denomination 

100  Francs 

50  Francs 

20  Francs 

10  Francs 

5  Francs 

The  50  and  100  Franc  pieces  are  seldom  seen  in  general  circulation. 

The  following  gold  coins  embrace  what  bankers  term  "French 
Gold:"  The  10  and  20-franc  pieces  of  France,  Belgium,  and 
Switzerland,  the  10  and  20-iire  pieces  of  Italy,  the  10  and  20- 
drachma  pieces  of  Greece,  the  10  and  20-dinar  pieces  of  Servia, 
the  10  and  20-lei  pieces  of  Roumania,  the  10  and  20-franc 
pieces  of  Tunis  (Africa),  the  20-peseta  pieces  of  Spain,  the  4  and 
8-florin  pieces  of  Austria,  and  the  7^-ruble  pieces  of  Russia. 
The  Tunis  gold  pieces  are  subject  to  a  slight  discount  in  Paris. 
The  40,  50  and  100-franc  pieces  of  France,  and  the  100-franc 
pieces  of  Monaco,  are  occasionally  seen  and  are  included  in  "French 
Gold." 


Gross  Weight            Fineness               Pure  Gold 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

497.8178 

900 

448.0360 

19.2952 

248.9089 

900 

224.0180 

9.6476 

99.5635 

900 

89.6072 

3.8590 

49.7817 

900 

44.8036 

1.9295 

24.8908 

900 

22.4018 

.9647 

SILVER  COINS. 


Denomination 

5  Francs 

2  Francs 

1  Franc 

50  Centimes 

20  Centimes 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths'! 

(Grains) 

Money 

385.8089 

900 

347.2280 

$0.9647 

154.3235 

835 

128.8601 

.3859 

77.1617 

835 

64.4300 

.       .1929 

38.5808 

835 

32.2150 

.0964 

15.4323 

835 

12.8860 

.0385 

12  FOREIGN  EXCHANGE  TEXT  BOOK 

Silver  coins  of  less  than  5  francs,  bearing  date  prior  to  1863,  are  not 
current  and  should  be  rejected.  The  20-centime  silver  piece  is  seldom 
seen  in  general  circulation. 

The  silver  coins  of  the  value  of  5  francs  are  known  as  "ecus"  in 
France  and  are  receivable  to  any  amount.  The  variety  of  ecus  is  very 
large  and  those  in  circulation  are:  French,  any  date  from  Napoleon  I; 
Swiss,  from  Confederation;  Italian,  from  Napoleon  I;  Sicilian,  Sardinian, 
Belgian  and  Greek.  The  following  "ecus"  were  withdrawn:  Ferdi- 
nand II.  Provisional  Government  (Italian)  1813,  Roumanian  and  Spanish. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

25  Centimes  (Nickel)         Pure  Nickel  108.0240  $0.0482 

10  Centimes  (Bronze)  ]  q5C/  {  154.3235  ]                                .0192 

5  Centimes  (Bronze)        vo.fe  ;.  77.  1617  I  To  the  amount    .0096 

2  Centimes  (Bronze)  [    *$    -  ]     30. 8647  f     of  5  Francs.       .0038 

1  Centime    (Bronze)  J     l  /0  z  (    15. 4323 J                                .0019 

The  5  centimes  piece  is  called  "sou;"   the  10  centimes  piece  "2  sou." 

The  following  is  a  list  of  countries  owned  or  controlled  by 
France  where  French  gold  would  be  current.  Most  of  these 
countries  have  adopted  the  French  monetary  system:  Algeria, 
Comoro  Islands,  Andorra,  Guadaloupe,  Guiana,  Indo-China, 
Madagascar,  Martinique,  Obok,  Reunion,  Senegal  and  Tunis. 


Money  of  Belgium. 

Unit:    Franc=100  Centimes. 
(Table  of  weights  of  money,  same  as  for  France.) 

The  actual  value  of  the  gold  franc  of  Belgium  in  the  money 
of  the  United  States  as  declared  by  the  director  of  the  U.  S. 
mint  is  the  same  as  the  franc  of  France  and  Switzerland, 
namely,  19  3-10  cents  ($0.193).  The  commercial  value  of  the 
Belgian  franc  in  the  United  States  is  generally  a  trifle  less 
than  the  French  franc  and  fluctuates  according  to  the  demand 
for  checks,  drafts  and  bills  of  exchange  on  Belgium,  and  the 
supply  of  such  exchange  in  the  market  for  sale. 

The  paper  currency  and  gold,  silver  and  minor  coins  in  cir- 
culation with  the  weight,  fineness,  etc.,  of  coins,  and  their 
approximate  equivalent  value  in  the  United  States  money  are 
as  follows: 

PAPER  MONEY. 

By  Banque  Nationale  de  Belgique,  20  Francs  ($3.86),  50  Francs 
($9.65),  100  Francs  ($19.30),  500  Francs  ($96.50),  1000  Francs  ($193.00). 


Gross  Weight            Fineness               Pure  Gold 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

497.8178 

900 

448.0360 

$19.2952 

248.9089 

900 

224.0180 

9.6476 

99.5635 

900 

89.6072 

3.8590 

49.7817 

900 

44.8036 

1.9295 

24.8908 

900 

22.4018 

.9647 

THE  MONETARY  SYSTEMS  OF  THE  WORLD  13 

GOLD  COINS. 

Gross  Weil* 
Denomination 

100  Francs 

50  Francs 

20  Francs 

10  Francs 

5  Francs 

The  50  and  100-Franc  pieces  are  seldom  seen  in  general  circulation. 
SILVER  COINS. 

Gross  Weisr: 
Denomination 

5  Francs 

2  Francs 

1  Franc 
50  Centimes 
20  Centimes 

Silver  coins  of  less  than  5  francs  bearing  date  prior  to  1863,  are  not 
current  and  should  be  rejected.  The  20-centime  silver  piece  is  seldom 
seen  in  general  circulation. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Vaii:e 


Gross  Weight             Fineness               Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

385.8089 

900 

347.2280 

$0.9647 

154.3235 

835 

128.8601 

.2859 

77.  1617 

835 

64.4300 

.1929 

38.5808 

835 

32.2150 

.0964 

15.4323 

835 

12.8860 

.0285 

5  Centimes  (Nickel)      f  25%  mckel        46.  2970  f    of  5  Francs.  0096 

2  Centimes  (Copper)     I  61  .  7294  |  To  the  amount     .  0038 

1  Centime    (Copper)     J  pu  30.86471     of  2  Francs.         .0019 

Money  of  Switzerland. 

Unit:  Franc=100  Centimes 

(Table  of  weights  of  money,  same  as  for  France.) 

The  actual  value  of  the  gold  franc  of  Switzerland  in  the 
money  of  the  United  States,  as  declared  by  the  Director  of  the 
U.  S.  mint,  is  the  same  as  the  franc  of  France  and  Belgium, 
namely:  19  3-10  cents  (SO.  193).  The  commercial  value  of  the 
Swiss  franc  in  the  United  States  is  generally  a  trifle  less  than 
the  French  franc,  and  fluctuates  according  to  the  demand  for 
checks,  drafts  and  bills  of  exchange  on  Switzerland  and  the 
supply  of  such  exchange  in  the  market  for  sale. 

The  paper  currency  and  gold,  silver  and  minor  coins,  princi- 
pally in  circulation,  with  the  weight,  fineness,  etc.,  of  the  coins, 
and  their  approximate  equivalent  value  in  United  States  money, 
are  as  follows: 

PAPER  MONEY. 

Swiss  notes  are  issued  by  the  forty-two  Banks  of  Emission,  the 
designs  of  which  are  the  same  for  all  banks,  the  text  on  the  various  notes 
varying  and  being  applicable  only  to  the  individual  banks.  The  denom- 
inations are:  50  Francs  ($9.65),  100  Francs  ($19.30),  1000  Francs 
($193.00. 


FOREIGN  EXCHANGE  TEXT  BOOK 


GOLD  COINS. 


Denomination 

100  Francs 

50  Francs 

20  Francs 

10  Francs 

5  Francs 


Gross  Weight            Fineness 
(Grains!            (Thousandths) 

Pure  Gold 
(Grains) 

497.8178 

900 

448.0360 

248.9089 

900 

224.0180 

99.5635 

900 

89.6072 

49.7817 

900 

44.8036 

24.8908 

900 

22.4018 

Value  in 

United  States 

Monev 

$19.2952 

9.6476 

3.8590 

1.9295 

.9647 


SILVER  COINS. 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 

United  States 
Money 

385.8089 

900 

347.2280 

$0.9647 

154.3235 

835 

128.8601 

.3859 

77.  1617 

835 

64.4300 

.1929 

38.5808 

835 

32.2150 

.0964 

15.4323 

835 

12.8860 

.0385 

Denomination 

5  Francs 

2  Francs 

1  Franc 
50  Centimes 
20  Centimes 

Silver  coins  of  less  than  5  francs  bearing  date  prior  to  1863  are  not 
current  and  should  be  rejected.  The  20-centime  silver  piece  is  seldom 
seen.  The  50-centime,  1-franc  and  the  2-franc  pieces  with  the  reclining 
figure  have  been  withdrawn. 


Denomination 
20  Centimes  (Nickel) 
10  Centimes  (Nickel) 
5  Centimes  (Nickle) 

2  Centimes  (Bronze) 
1  Centime  (Bronze) 


MINOR  COINS. 

Gross  Weight 

(Grains) 

61.7294 
46.2970 
30.8647 


Legal  Tender 

!To  the  amount 
of  10  Francs. 

38.5807  |  To  the  amount      .0038 
23.14851      of  2  Francs.         .0019 


Value 
.  0385 
.0192 
.0096 


Composition 

Pure  Nickel 
75%  copper 
25%  nickel 
95%  copper 

4%  tin  and 

1%  zinc 

The  10  and  5-centime  pieces  of  brass  (plated)  of  old  issue  are  with- 
drawn. 

For  further  information,  see  money  of  France,  pages  10,  11  and   12. 


Money  of  Italy. 

Unit:     Lira=100  Centesimi  (singular,  Centesimo). 
(Table  of  weights  of  money,  same  as  in  France.) 

The  actual  value  of  the  gold  lira  (plural  lire)  in  the  money 
of  the  United  States  as  declared  by  the  Director  of  United  States 
mint  is  19  and  3-10  cents  ($0.193).  The  commercial  value  of 
the  lire  in  the  United  States  fluctuates  according  to  the  demand 
for  checks,  drafts  and  bills  of  exchange  on  Italy  and  the  supply 
of  such  exchange  in  the  market. 

The  paper  currency  and  gold,  silver  and  minor  coins,  princi- 
pally in  circulation,  with  the  weight,  fineness,  etc.,  of  the  coins, 
and  the  approximate  equivalent  value  in  United  States  money, 
are  as  follows: 

(PAPER  MONEY. 

Banca  d' Italia  notes.  50  Lire  ($9.65).  100  Lire  ($19.30),  500  Lire 
($96.50),  1000  Lire  ($193.00).  The  State  notes,  5  Lire  ($0.97),  10  Lire 
($1.92),  25  Lire  ($4.83),  Banca  di  Napoli  notes,  of  50,  100,  500  and  1,000 
Lire  of  same  value  as.  Banca  d'ltalia  notes.  Notes  of  Banca  Nationale 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


15 


were  withdrawn  and  replaced  with  those  of  Banca  d'ltalia,  the  more 
familiar  ones  being  Lire  500,  yellow;  Lire  100,  pink;  Lire  50,  white  with 
pale  blue  print  on  paper  very  flimsy.  Notes  of  local  banks  not  mentioned 
above  are  accepted  by  bankers  only  for  collection.  Notes  of  various 
denominations  issued  by  the  Banca  Nationale,  Banca  Toscana,  Banca 
Toscana  di  Credito,  were  withdrawn  June  30th,  1905,  on  account  of  these 
Banks  having  consolidated  with  the  Banca  d'ltalia. 


GOLD  COINS. 


Denomination 
20  Lire 
10  Lire 
5  Lire 


Gross  Weight 
(Grains) 

Fineness 
(Thousandths) 

Pure  Gold 
(Grains) 

99.5635 

900 

89.6072 

49.7817 

900 

44.8036 

24.8908 

900 

22.4018 

The  5-lire  gold  piece  is  seldom  seen. 

SILVER  COINS. 


Value  in 

United  States 
Money 

$3.8590 

1.9295 

.9647 


Value  in 

Gross  Weight  Fineness  Pure  Silver  United  State* 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

5  Lire  385   8089  900  347.2280  $0.9647 

2  Lire  154.3235  835  128.8601  .3859 

1  Lira  77.1617  835  64.4300  .1929 

50  Centesimi  38.5808  835  32.2150  .0964 

20  Centesimi  15.4323  835  12.8860  0385 

The  5-lire  pieces  of  Sardinia  and  Sicili  are  also  current  at  their  face 

value. 

The  regulations  regarding  silver  coins  are  similar  to  those  mentioned 
under  head  of  silver  coins  of  France.  The  Papal  silver  coins  are  demonet- 
ized, but  the.  10  and  20-lire  gold  pieces  have  values  slightly  under  their 
face  value.  The  Papal  silver  coins  are  only  worth  the  actual  value  of 
their  silver,  and  the  only  ones  at  present  appearing  are  those  of  Pius  IX. 


MINOR  COINS. 


Denomination 


Composition 


Gross  Weight 
(Grains) 


Legal  Tender 


20  Centesimi  (Nickel)     /  75%  copper   \    R1    70QA  /  To  amount    | 
25  Centesimi  (Nickel)     \  25%  nickel     /  *  \    of  5  Lire      j 


10  Centesimi  (Bronze) 
5  Centesimi  (Bronze) 
2  Centesimi  (Bronze) 
1  Centesimo  (Bronze) 


96%  copper 

4%  tin 


154.3235  | 

77.1617  [  To  amount  of 
30.8647  {  each  piece. 
15.4323 


Value 
1.0385 
.0483 
.0192 
.0096 
.0038 
.0019 


Money  of  Bulgaria. 
Unit:     Lew  (Lev)=100  Stotinki 
(Table  of  weights  of  money,  same  as  France.) 
Bulgaria  has  the  double  standard.     The  present  monetary 
system  was  established  in  1880.     The  country  has  no  mint;  its 
silver  pieces  being  coined  in  other  countries. 

The  actual  value  of  the  gold  lew  or  lev,  in  the  money  of  the 
United  States,  as  declared  by  the  Director  of  the  United  States 
mint  is  19  and  3-10  cents  ($0.193).  Exchange  on  cities  of 
Bulgaria  is  rarely,  if  ever,  drawn  in  Bulgarian  money,  it  being 
customary  to  draw  such  exchange  in  French,  English  or  German 
money  "at  exchange"  on  Paris,  London  or  Berlin;  therefore, 
the  lew  has  no  commercial  value  as  exchange  in  the  United 


16  FOREIGN  EXCHANGE  TEXT  BOOK 

States,,  the  cost  of  remittance  being  governed  by  the  price  of 
exchange  on  the  other  countries  mentioned.  The  paper  currency 
and  gold,  silver  and  minor  coins  in  circulation,  with  their  weight, 
fineness,  etc.,  and  their  approximate  equivalent  value  in  United 
States  money,  are  as  follows: 

PAPER  MONEY. 

Xotes  issued  by  the  Banque  Xationale  Bulgare.  Gold  notes  marked 
"Zuamo,"  5  Lews  ($0.97),  10  Lews  ($1.93),  20  Lews  ($3.86,.  50  Lews 
($9.65),  100  Lews  ($19.30);  Silver  Xotes  marked  "Epedpo,"  5  Lews 
($0.97),  10  Lews  ($1.93),  50  Lews  ($9.65).  The  50-Lews  gold  notes  are 
being  withdrawn  from  circulation  to  be  re-issued  again  with  the  word 
"Epedpo"  (silver)  printed  over  the  world  "Zuamo"  (gold). 

GOLD  COINS. 

The  present  monetary  law  provides  for  the  coinage  of  10 
and  £0-lew  gold  pieces,  but  up  to  the  present  time  none  have 
been  coined.  In  the  meantime  foreign  gold  coins  have  been 
officially  rated  as  follows: 

English  Sovereign  at  Lews 25 .  25 

German  20-Mark  pieces  at  Lews 24. 50 

French  20-Franc  pieces  at  Lews 20. 00 

Russian  Old  Imperial  at  Lews 20.  50 

Turkish  Pound  at  Lews 22.  70 

Austrian  Ducat  at  Lews 1 1 . 60 

The  weight,  fineness,  etc.  of  the  new  20-lew  piece  will  be 
as  follows: 

Value  in 

Gross  Weight          Fineness  Pure  Gold  United  States 

Denomination  (Grains)          (Thousandths)  (Grains)  Money 

20  Lews  (Alexander)   99.5635  900  89.6071  $3.8590 

SILVER  COINS. 

Gross  Wei  or] 
Denomination 

5  Lews 
2  Lews 
1  Lew 
\  Lew 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

20  Stotinki  ]                                   f      77.1617  ]                                      $0.0385 

10  Stotinki  x.  ,    .                    61.7294                f\o  dita) 

5  Stotinki  46.2970  f 

2 \  Stotinki  J                                  (      30.8647  J                                         .0048 

This  country  has  practically  the  same  monetary  system  afe 
France  and  other  Latin  Union  countries. 


Gross  Weight             Fineness               Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

385.8089 

900 

347.2280 

$0.9648 

154.3235 

835 

128.8601 

.3858 

77.1617 

835 

64.4300 

.1929 

38.5808 

835 

32.2150 

.  0965 

THE  MONETARY  SYSTEMS  OF  THE  WORLD 


17 


Money  of  Greece. 

Unit:     Drachma=100  Lepta  (singular,  Lepton) 
(Table  of  weights  of  money,  same  as  France.) 

The  actual  value  of  the  gold  drachma  in  the  money  of  the 
United  States,  as  declared  by  the  Director  of  the  United  States 
mint,  is  19  and  3-10ths  cents  (SO.  193).  Exchange  on  cities  in 
Greece  is  rarely,  if  ever,  drawn  in  the  money  of  Greece,  but  instead 
is  issued  in  English,  French  or  German  money,  and  for  that  reason 
the  drachma  has  no  commercial  value  in  the  United  States,  the 
cost  of  remittance  to  Greece  being  governed  by  the  price  of 
exchange  on  England,  France  or  Germany. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  and  the  weight,  fineness,  etc.,  of  coins,  and  their 
approximate  equivalents  in  United  States  money,  are  as  follows : 

PAPER  MONEY. 

Bank  notes  are  issued  in  various  denominations  of  drachma 
bv  banks. 


Denomination 

20  Drachma 

10  Drachma 

5  Drachma 


GOLD  COINS. 

Fineness  Pure  Gold 

(Thousandths)  (Grains) 

99.5635      900  89.6072 

49.7817      900  44.8036 

24.8908      900  22.4018 


Gross  Weight 
(Grains) 


Value  in 

United  States 

Money 

$3:859C 

1.9295 

.9647 


SILVER  COINS. 


Denomination 

5  Drachma 

2  Drachma 

1  Drachma 
50  Lepta 
20  Lepta 

For  further  information  concerning  silver  coins,  see  money  of  France, 
page  10. 

The  gold  and  silver  coins  of  Greece  are  similar  to  those  issued  in 
France  and  other  countries  comprising  the  Latin  Union. 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

385.8089 

900 

347.2280 

$0.9647 

154.3235 

835 

128.8601 

.3859 

77.1617 

835 

64.4300 

.1929 

38.5808 

835 

32.2150 

.0964 

15.4323 

835 

12.8860 

.0385 

MINOR  COINS. 


Denomination 

20  Lepta  (Nickel) 

10  Lepta  (Nickel) 

5  Lepta  (Nickel) 

2  Lepta  (Bronze) 
1  Lepton  (Bronze) 


Composition 

1  75%  copper 
j  25%  nickel 

95%  copper 

4%  tin 
1%  zinc 


Legal  Tender 


Gross  Weight 
(Grains) 

61.7294] 

46.2970  | 

30.8647  I  To  amount  of 

30.8647         5  Drachma 

15.4323  I 


Value 
$0.0385 
.0192 
.0096 

.0038 
.0019 


18  FOREIGN  EXCHANGE  TEXT  BOOK 

Money  of  Germany. 

Unit:     Reichsmark  or  Mark=100  Pfennigs 

(Table  of  weights  of  money,  same  as  France.) 

The  actual  value  of  the  gold  German  mark  in  the  money 
of  the  United  States  as  declared  by  the  Director  of  the  United 
States  mint,  is  23  8-10ths  cents  ($0.238).  The  commercial  value 
of  the  mark  in  the  United  States  fluctuates  according  to  the 
demand  for  checks,  drafts  or  bills  of  exchange  on  Germany,  and 
the  supply  of  such  exchange  in  the  market  for  sale. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  with  the  weight,  fineness,  etc.,  and  the  approximate 
equivalent  value  in  United  States  money,  are  as  follows: 

PAPER  MONEY. 

5-Marks  ($1.19),  20  Marks  ($4.76),  50  Marks  $(11.90),  100  .Marks 
($23.80),  1,000  Marks  ($238.00). 

The  following  bank  notes  circulate  generally  throughout  the  empire: 
Badische  Bank,  100  marks;  Baye.rische  Bank,  100  marks;  Sachsische 
Bank,  100  marks;  Wtirthemberische  Noten  Bank,  100  marks. 

Notes  of  the  following  banks  are  withdrawn  from  circulation,  the 
closing  day  being  December  31,  1905:  Bank  fur  Sud  Deutschland, 
Darmstadt,  and  Frankfurter  Bank.  There  are  a  few  notes  of  private 
banks  still  extant,  but  they  are  considered  worthless. 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grams:)  Money 

Double  Crown 

(20  Marks)  122.9177  900  110.6260  $4.7642 

Crown  (10  Marks)        61.4588  900  55.3130  2.3821 

A  5-mark  piece  was  formerly  coined,  but  is  now  out  of  circulation. 
Light  gold  pieces  are  redeemed  at  par  where  the  abrasion  is  the  result  of 
circulation  only. 

SILVER  COINS. 

Orn<;s  \V*>io- 

Denomination 

5  Marks 

2  Marks 

1  Mark 
50  Pfennigs 

A  3-mark  (German  thaler)  piece  is  also  in  circulation,  its  value  in 
U.  S.  money  being  about  72  cents.  A  20-pfennig  piece  was  formerly 
coined,  but  is  now  withdrawn. 

Silver  "thalers"  issued  by  any  of  the  German  Confederate  States, 
comprising  the  German  Empire,  are  current,  no  matter  what  their  date 
of  issue  may  be,  although  they  are  now  being  withdrawn  from  circulation. 
Xo  date  has  as  yet  been  fixed  when  they  will  have  become  finally  demon- 
etized. Excluded  from  circulation  are  only  the  Austrian  vereinthalers. 
They  are  entirely  withdrawn  and  have  value  only  to  collectors  of  old 
coins. 


Gross  Weight             Fineness                Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
Uniteil  States 
Money 

428.6765 

900 

385.8089 

$1.1910 

171.4706 

900 

154.3235 

.4764 

85.7353 

900 

77.1617 

.2382 

42.8676 

900 

38.5808 

.1191 

THE  MONETARY  SYSTEMS  OF  THE  WORLD 


19 


Gross  Weight 

Composition 

(Grains) 

Legal  Tender 

Value 

/  75%  copper 

61.7294  1 

SO.  0238 

1  25%  nickel 
f  95%  copper 

J          AG7     -fin 

38.5808 
}  51.  4406  ! 

To  amount  of 
1  Mark. 

.0119 
.0047 

1        *  70    "n 

30.8647 

.0023 

l%zinc 

J                   J 

MINOR  COINS. 

Denomination 
10  Pfennigs  (Nickel) 
5  Pfennigs  (Nickel) 

2  Pfennigs  (Bronze) 
1  Pfennig  (Bronze) 

The  old  20-pfennig  piece  of  nickel  has  been  withdrawn. 

Money  of  the  Netherlands  (Holland). 

Unit:  Florin  or  Gulden=100  Cents 
(Table  of  weights  of  money,  same  as  France.) 
The  money  of  account  of  Holland  is  the  florin,  gulden  or 
guilder  (different  translations  of  the  same  name),  of  100  cents. 
The  actual  value  of  the  gold  florin  in  the  money  of  the  United 
States  as  declared  by  the  Director  of  the  United  States  mint  is 
40  and  2-10  cents  ($0.402).  The  commercial  value  of  the 
florin  in  the  United  States  fluctuates  according  to  the  demand 
for  checks,  drafts  and  bills  of  exchange  on  Holland  and  the  supply 
of  such  exchange  in  the  market  for  sale.  The  money  in  circulation 
consists  of  paper  currency,  and  gold,  silver  and  copper  coins,  and 
the  weight,  fineness,  etc.,  of  the  latter,  and  the  approximate 
equivalent  value  in  the  money  of  the  United  States,  are  as  follows: 

PAPER  MONEY. 

25  Gulden  ($10.05),  40  Gulden  ($16.08),  60  Gulden  ($24.12),  100 
Gulden  ($40.20),  200  Gulden  ($80.40),  300  Gulden  ($120.6Q),  1000 
Gulden  ($402.00),  issued  by  the  Netherlandsche  Bank.  State  Bank  notes 
of  50  and  10  Gulden  (value  $20.10  and  $4.02  respectively) ,  payable  by  the 
Netherlandsche  Bank,  are  also  issued. 


GOLD  COINS. 


Gross  Weight 
(Grains) 


Fineness 
(Thousandths) 

900 


Pure  Gold 
(Grains) 

93.3348 


Value  in 

United  States 
Money 

$4.0195 


Denomination 

10-Gulden  103.7054 

The  old  10-florin  pieces  are  subject  to  discount.  Only  the  10-gulden 
or  florin  of  William  III  and  Queen  Wilhelmine  are  now  current.  The 
ratio  in  coinage  of  gold  to  silver  is  1  to  15.  625. 


SILVER  COINS. 


Denomination 

Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Rixdaler 

(2|  Gulden) 
Gulden 

385.8089 
154.3235 

945 
945 

364.5894 
145.8357 

Half-Gulden 

77.1617 

945 

72.9178 

Quarter-Gulden 
(25  cents) 
Tenth-Gulden 

55.1706 

640 

35.3092 

(10  cents) 
Twentieth  Gulden 

21.6052 

640 

13.8273 

(5  cents) 

10.5711 

640 

6.7655 

Value  in 

United  Htates 

Money 


$1.0049 
.4019 
.2009 

.1005 
.0401 
.0201 


20  FOREIGN  EXCHANGE  TEXT  BOOK 

Guilders  issued  before  1840  and  the  50-cent  piece  of  William  I  are 
withdrawn  from  circulation.  No  2J  gulden,  William  III,  pieces  have 
been  issued  since  1874.  Trade  coins  known  as  the  ducat  and  double 
ducat  are  in  circulation,  but  their  coinage  has  been  discontinued. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

2J  cents  [  95%  copper    1     61.7294]™,,  $0.0100 

1     cent  \     4%  tin  and   ^     38.5807      1°^eTa,m<  .0040 

i  cent  [     1%  zinc        j      19. 2903 J  .0020 

The  monetary  system  of  the  Dutch  colonies  is  the  same  as 
that  of  the  mother  country. 

Money  of  Norway,  Sweden  and  Denmark  (Scandinavian  Union) 

Unit:  Krone  or  Crown=100  Ore 
(Table  of  weights  of  money,  same  as  France.) 
The  Scandinavan  Monetary  Union  embraces  Norway,  Sweden 
and  Denmark,  and  the  value  of  the  gold  krone  or  crown  in  the 
money  of  the  United  States,  as  declared  by  the  director  of  the 
United  States  mint,  is  26  and  8-10th  cents' ($0.268).  The  com- 
mercial value  of  the  krone  (plural  kronor)  in  the  United  States 
fluctuates  according  to  the  demand  for  checks,  drafts  and  bills  of 
exchange  on  these  countries,  and  the  supply  of  such  exchange  in  the 
market  for  sale.  Silver  coins  are  legal  tender  as  follows:  The 
2-kronor  and  1-krone  pieces  to  the  amount  of  20  kronor;  the  50, 
40,  25  and  10  ore  pieces  to  the  amount  of  5  kronor.  The  money 
in  circulation  consists  of  paper  currency  and  gold,  silver  and 
bronze  coins,  the  weight,  fineness,  etc.,  of  coins  and  the  equivalent 
value  in  the  money  of  the  United  States,  being  as  follows: 

PAPER  MONEY. 

Since  January  1st,  1904,  notes  in  circulation  are  issued  only  oy  the 
Norges  Bank  in  Norway,the  Sveriges  Riksbank  in  Sweden,  and  the  Danskc 
National  Bank  of  Denmark,  in  denominations  as  follows:  5  Kronor 
($1.34),  10  Kronor  ($2.68),  50  Kronor  ($13.40),  100  Kronor  ($26.80) 
500  Kronor  ($134.00),  1000  Kronor  ($268.00). 


GOLD  COINS. 


Denomination 

20  Crowns 

10  Crowns 

5  Crowns 


Denomination 
2  Crowns 
1  Crown 

50  Ore 

40  Ore 

25  Ore 

10  Ore 


Gross  Weight 
(  Grains) 

Fineness 
(Thousandths) 

Pure  Gold 
(Grains) 

Value  in 
United  States 
Money 

138.2831 

900 

124.4548 

$5.3598 

69.1415 

900 

62.2274 

2.6799 

34.5707 

900 

31.1137 

1.3389 

SILVER  COINS. 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

231.4853 

800 

185.1882 

$0.5359 

115.7426 

800 

92.5941 

.2679 

77.1617 

600 

46.2970 

.1339 

61.7294 

600 

37.0376 

1070 

37.3463 

600 

22.4077 

.0669 

22.3769 

400 

8.9507 

.0267 

THE  MONETARY  SYSTEMS  OF  THE  WORLD  21 


MINOR  COINS  (Bronze). 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

50re  (95%copper      )  123.4588  )  Tth  $0.0133 

2  Ore 
1  Ore 


(95%copper      )  123.4588  )  Tth  $0.0133 

4%  tin  and     ^    61  .  7294  }•  1°ft,i?™O"nt  .0053 

(    1%  zinc.         j     30.  8647  J  0026 


Money  of  Austria-Hungary. 

Unit:     Krone  (Korona)  or  Crown=100  Heller  (farthings). 
(Table  of  weights  of  money,  same  as  France.) 

The  present  unit  system  dates  from  1892.  The  former  unit 
was  the  florin  (or  guilder)  of  100  kreutzers.  During  the  change 
from  the  old  to  the  new  system  the  old  coins  are  accepted  on  the 
basis  of  one  florin  for  2  crowns;  1  kreutzer  for  2  hellers. 

The  actual  value  of  the  gold  krone  (korona)  (plural  kronen) 
in  the  money  of  the  United  States,  as  declared  by  the  director  of 
the  United  States  mint  is  20  and  3-10  cents  *  ($0.203).  The 
commercial  value  of  the  krone  or  crown  in  the  United  States 
fluctuates  according  to  the  demand  for  checks,  drafts  and  bills 
of  exchange  on  these  countries  and  the  supply  of  such  exchange 
in  the  market  for  sale.  The  money  in  circulation  consists  of 
paper  currency,  gold,  silver  and  nickel  coins.  The  weight, 
fineness,  etc.,  of  coins  and  the  approximate  value  in  the  money 
of  the  United  States,  are  as  follows: 

PAPER  MONEY. 

5  Kronen  ($1.02),  10  Kronen  ($2.03),  50  Kronen  ($10.15),  100 
Kronen  ($20.30)  1000  Kronen  ($203.00). 

The  old  gulden  or  florin  currency  —  of  which  a  considerable  amount 
is  still  in  circulation  —  -with  the  date  of  final  redemption  is  as  follows: 

5  Florins  (equal  to       10  Kronen)  August  31st,  1907. 
10  Florins  (equal  to      20  Kronen)  August  31st,  1909. 
50  Florins  (equal  to    100  Kronen)  August  31st,  1907,  (a  few  left). 
100  Florins  (equal  to    200  Kronen)  October  31st,  1910. 
1000  Florins  (equal  to  2000  Kronen)  December  31st,  1910. 

After  these  dates  they  will  be  valueless. 

The  new  crown  or  kronen  notes  are  of  colors  as  follows:  10  crowns, 
mauve;  20  crowns,  red;  50  crowns,  blue;  100  crowns,  olive  green; 
1000  crowns,  olive  green. 

Austrian  paper  money  remains  in  circulation  provisionally.  The 
paper  florin  is,  like  the  silver  florin,  worth  2  crowns. 

GOLD  COINSL- 

Value  in 

United  States 

Money 

$4.0525 
2.0262 
9.1515 

2.2878 

The  8  florin  and  4  florin  gold  trade  coins  although  Austrian  are 
treated  as  "French  Gold"  but  are  to  be  no  longer  coined  (see  money  of 
France,  page  10).  The  ducat  is  a  gold  coin  corresponding  in  size  to  the 


Denomination 
20  Crown  piece 
10  Crown  piece 
4  Ducats 
1  Ducat 

Gross  Weight 
(Grams) 

104.5552 
52.2776 
215.4912 
53.8728 

Fineness 
(Thousandths) 

900 
900 
986    1-9 
986    1-9 

Pure  Gold 
(Grains) 

94.0997 
47.0498 
212.4983 
53.1245 

22  FOREIGN  EXCHANGE  TEXT  BOOK 

10  kronen  piece.  There  are  also  2  ducat  and  4  ducat  pieces.  The 
4  ducat  piece  is  a  very  large,  thin  coin,  about  as  large  as  a  twenty  dollar 
United  States  gold  piece,  but  only  half  as  thick.  Those  issued  in  1903  are 
called  "Munzducaten;"  those  of  previous  years  "Randducaten."  The 
value  of  the  ducat  is  about  $2.30  United  States  money.  The  4  ducat 
piece  is  worth  about  $9.15,  or  four  times  the  value  of  the  single  ducat, 
plus  2  kronen  10  heller  for  a  special  minting  charge.  The  ducat  gold 
pieces  are  not  legal  tender,  but  are  a  commercial  coin,  and  the  4  ducat 
piece  is  only  coined  to  order  at  a  special  minting  charge  of  2  kronen  10 
heller  extra.  The  deduction  for  light  weight  gold  is  l-7th  the  total 
value  for  every  1-2  gramme  light.  The  ratio  of  gold  to  subsidary 
silver  in  the  new  system  is  1  to  13.69. 

SILVER  COINS. 

Value  in 

United  States 

Money 

$1.0131 
.2026 
.8104 
.4052 
.1013 
.0810 
.0405 

The  20  and  10  kreutzer  pieces  are  now  accepted  only  for  bullion  value. 
The  Maria-Theresa  Levantine  silver  Thaler  pieces  continue  to  be 
stamped  as  trade  coins,  with  the  old  weight  and  fineness,  and  are  worth 
about  97  cents  in  United  States  money.  Silver  coins  are  unlimited  legal 
tender  to  the  State  at  their  nominal  value;  to  private  parties  to  the 
amount  of  50  crowns. 

The  introduction  of  coins  of  the  new  system  will  be  made  by  degrees, 
in  the  course  of  several  years,  during  which  time  the  coins  of  the  old 
silver  standard  as  well  as  the  state  notes  will  remain  current.  The  coins  of 
the  new  system,  multiplied  by  two,  are  the  same  value  ;is  the  pieces  of 
the  old  silver  and  paper  currency,  1  silver  or  paper  florin,  for  instance, 
being  equal  to  2  crowns,  and  1  kreutzer  to  2  hellers.  The  vj>lue  of  the 
new  crown  is  $0.2026  against  $0.4052,  the  value  of  the  old  florin. 

The  5-crown  silver  pieces  are  coined  exclusively  for  account  of  the 
State.  This  coin  is  unlimited  legal  tender  to  the  State,  at  its  nominal 
value;  in  private  business  transactions,  to  250  crowns. 

A  decree  was  issued  January  28.  1901,  ordering  the  retirement  of  the 
2  and  J  florin  pieces,  and  they  are  now  out  of  circulation. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

20  Hellers  (Nickel)   \.-o          .  ,    ,    j   61  .  7294  \  To  amount  of      |  $0.0405 
10  Hellers  (Nickel)    {  l    }   46.2970]     10  Crowns.        I       .0202 


Gross  Weight 

Fineness 

Pure  Silver 

Denomination 

(Grains)           (Thousandths) 

(Grains) 

5  Crown  piece 

370.3765 

900 

333.3388 

1  Crown  piece 

77.1617 

835 

64.4300 

2  Florins 

381.0462 

900 

342.9416 

1  Florin 

190  5231 

900 

171.4708 

\  Florin 

82.4381 

520 

42.8678 

20  Kreutzers 

41.  1529 

500 

20.5764 

10  Kreutzers 

25.7205 

400 

10.2882 

tc°PPer,  1    51  .  441  1        n  Public  account 
$£*]   25.  7205 


Money  of  Russia. 
Unit:     Ruble=100  Kopecks  (Copecks) 

The  actual  value  of  the  gold  ruble  in  the  money  of  the 
United  States  as  declared  by  the  Director  of  the  United  States 
mint,  is  51  and  5-10  cents  (SO.  515).  The  commercial  value 
of  the  ruble  in  the  United  States  fluctuates  according  to  the 
demand  for  checks,  drafts  and  bills  of  exchange  on  Russia,  and 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


23 


the  supply  of  such  exchange  in  the  market  for  sale.  The  money 
in  circulation  consists  of  paper  currency  and  gold,  silver  and 
copper  coins.  The  denominations,  weight,  fineness,  etc.,  of  the 
coins,  and  the  approximate  equivalent  value  in  the  money  of  the 
United  States,  are  as  follows: 

PAPER  MONEY 

Ruble,  color,  yellow  ($0.52);  3  Ruble,  color,  green  back  ($1.55);  5 
Rubles,  color,  blue  ($2.58);  10  Rubles,  color,  red  ($5.15);  25  Rubles, 
color,  divers  ($12.88);  50  Rubles,  series  1899,  ($25.75);  100  Rubles, 
series  1898,  with  portrait  of  Catherine  ($51.50);  500  Rubles,  series  1898 
($257.50). 

The  notes  of  100  rubles,  rainbow  colored,  have  been  withdrawn 
since  January  1,  1903,  and  are  reimburseable  on  written  application  at 
Banque  de  L'Evat.  St.  Petersburg. 
The  5  and  10  ruble  notes,  this  shape  are  withdrawn. 


The  only  5  and  10  ruble  notes  now  current  are  those 
of  this  shape 


Care  must  be  taken  in  handling  Russian  notes,  as  some  excellent 
forgeries  t?re  extant,  especially  those  of  the  100  ruble  notes  mentioned 
above,  which  forgeries  were  considered  to  be  equal  to  the  original  notes. 
Until  recently  the  disparity  between  the  value  of  the  gold  ruble  and  the 
paper  ruble  was  considerable,  but  at  present  the  gold  and  paper  currency 
have  equal  value.  There  are  no  government  notes.  The  only  notes  in 
circulation  are  issued  by  the  Imperial  Bank  of  Russia,  but  they  are 
guaranteed  by  the  treasury. 

GOLD  COINS. 

OLD  ISSUE:  Alexander  III,  5  rubles  ($3.87);  10  rubles 
($7.73).  These  coins  are  worth  \\  times  their  face  value,  viz.: 
7i  and  15  rubles  respectively.  There  is  also  a  much  older 
gold  coin  (Imperale)  valued  at  about  10  rubles,  which  must  be 
purchased  as  gold,  as  it  is  now  withdrawn  from  circulation. 
GOLD  COINS  (Present  Issue.) 


Denomination 

15  Rubles 

(Imperial) 
10  Rubles 
1\  Rubles 

(Half  Imperial) 
5    Rubles 


Gross  Weight 
(Grains) 

199.1376 
132.7584 

99.5688 
66.3792 


Fineness 
(Thousandths) 

900 
900 

900 
900 


Pure  Gold 
(Grains) 

179.2239 
119.4826 

89.6119 
59.7413 


Value  in 

United  States 

Money 

$7.7185 
5.1456 

3.8592 
2.5728 


Gold  coin  of  full  weight  is  legal  tender  for  a  payment  of  any  amount. 
SILVER  COINS. 


Denomination 

1  Ruble 
50  Copecks 
25  Copecks 
20  Copecks 
15  Copecks 
10  Copecks 

5  Copecks 


Gross  Weight            Fineness 
(Grains)          (Thousandths) 
308.5811              900 

Value  in 
Pure  Silver             United  States 
(Grains)                        Money 
277.7230                $0.5145 

154.2905 

900 

138. 

8615 

.2573 

77.1452 

900 

69. 

4307 

.1286 

55.5446 

500 

27. 

7723 

.1029 

41.6584 

500 

20 

8292 

.0771 

27.7723 

500 

13 

8861 

.0514 

13.8861 

500 

6, 

9430 

.0257 

24  FOREIGN  EXCHANGE  TEXT  BOOK 

The  silver  ruble  of  Catharine  II  is  occasionally  seen  and  is  still 
receivable  by  the  State  Treasury. 

The  1  ruble,  50-copeck  and  25-copeck  pieces  are  legal  tender  among 
private  persons  to  an  amount  not  exceeding  25  rubles,  and  the  other 
silver  coins  to  the  amount  of  3  rubles.  Government  treasuries  receive 
any  of  these  silver  coins  to  any  amount,  in  all  payments  except  for  cus- 
toms duties,  the  amount  received  for  latter  being  governed  by  custom- 
house regulations. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

5  Copecks  Copper  252.78951  $0.0257 

3  Copecks  Copper  151.6737  .0154 

2  Copecks  Copper  101 . 1158  [  To  the  amount  .  0102 

1  Copeck  Copper  50   5579  f      of  3  Rubles.  .0051 

i  Copeck  Copper  25. 2789  |  .0025 

j  Copeck  Copper               12.6394J  .0012 

The  ratio  of  gold  to  silver  in  present  coinage  is  1  to  23-2438. 


Money  of  Finland. 

Unit:     Finmark=100  Penni 

{Table  of  weights  of  money,  same  as  France.) 

Finland  has  a  single  gold  standard.  Previous  to  1886 
Finland  had  the  same  monetary  system  as  Russia,  but  the  Credit 
Bills  in  the  latter  country  did  not  circulate  in  Finland.  By  the 
law  of  August  9,  1877,  the  present  monetary  system  was  established 
with  the  "markkaa"  (equal  to  the  franc)  as  a  monetary  unit. 

The  actual  value  of  the  gold  finmark  or  markkaa  in  the 
money  of  the  United  States  as  declared  by  the  Director  of  the 
United  States  mint,  is  19  and  3-10  cents  (SO.  193).  The 
commercial  value  of  the  finmark  in  the  United  States  fluctuates 
according  to  the  demand  for  checks,  drafts  and  bills  of  exchange 
on  Finland  and  the  supply  of  such  exchange  in  the  market  for 
sale.  The  money  in  circulation  in  Finland  consists  of  paper 
currency  and  gold,  silver  and  bronze  coins.  The  denominations, 
weight,  fineness,  etc.,  and  the  approximate  equivalent  value  in 
United  States  money,  are  as  follows: 

PAPER  MONEY. 

5  Finmarks  ($0.97),  10  Finmarks  ($1.93),  20  Finmarks  ($3.86), 
50  Finmarks  ($9.65),  100  Finmarks  ($19.30),  500  Finmarks  ($96.50)^ 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains!  Money 

20  Markkaa  99.5695  900  89.6126  $-3.8592 

10  Markkaa  49.7847  900  44.3063  1.9296 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


25 


SILVER  COINS. 


Denomination 
2  Markkaa 
1  Markkaa 
50  Penni 
25  Penni 


Denomination 
10  Penni 
5  Penni 
1  Penni 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

159.9562 

868 

138.8421 

$0.3859 

79.9781 

868 

69.4210 

.1929 

39.3370 

750 

29.5028 

.0965 

19.6685 

750 

14.7514 

.0483 

MINOR  COINS. 

Gross  Weight 
Composition  (Grains)  Legal  Tender 


95%  copper 

4%  tin  and 
1%  zinc 


]  197.4847  } 
•  98.  7423  j- 
J  19. 7484 J 


To  amount  of 
1  Markkaa. 


Value 
10.0192 
.0096 
.0019 


Money  of  Portugal. 
Unit:     Milreis=1000  Reis 

Table  of  Portuguese  Money. 

1  Milreis  =2i  Crusados=25  Reals=1000  Reis 

1    Crusado  =10  Reals=  400  Reis 

1  Real  =     40  Reis 

(Table  of  weights  of  money,  same  as  France.) 

The  present  monetary  system  of  Portugal  was  established  by 
the  law  of  July  29th,  1854,  with  the  milreis  of  1000  reis  as  mone- 
tary unit.  One  thousand  milreis,  or  1.000,000  reis,  is  called  a 
conto. 

The  actual  value  of  the  gold  milreis  in  the  money  of  the 
United  States  as  declared  by  the  Director  of  the  United  States 
mint,  is  SI. 08.  Since  exchange  on  places  in  Portugal  is  rarely, 
if  ever,  drawn  in  the  money  of  that  country,  but  instead  is  drawn 
in  English,  French  or  German  money,  the  milreis  has  no  com- 
mercial value  in  the  United  States  and  the  cost  of  remittances 
to  that  country  depends  upon  the  price  of  exchange  on  the  three 
countries  named.  In  that  country  it  is  the  practice  to  count 
large  sums  in  contos  or  thousands  of  milreis,  thus:  100  contos 
equal  100,000  milreis. 

The  currency  of  the  country  consists  almost  exclusively 
of  silver  and  inconvertible  paper.  The  paper  currency  and  gold, 
silver  and  minor  coins,  with  the  weight,  fineness,  etc.,  of  the 
coins  and  the  approximate  equivalent  value  in  United  States 
money,  are  as  follows: 


PAPER  MONEY. 

100SOOO  reis,  or  100  milreis  ($108.04),  50$000  reis,  or  50  milreis 
($54.02).  20SOOO  reis,  or  20  milreis  ($21.61),  10$000  reis,  or  10  milreis 
($10.80).  5SOOO  reis,  or  5  milreis  ($5.40),  2$500  reis,  or  2£  milreis  ($2.70). 


26 


FOREIGN  EXCHANGE  TEXT  BOOK 


GOLD  COINS. 


Gross  Weight 
(Grains) 

Fineness 
(Thousandths) 

Pure  Gold 

(Grains) 

Value  in 
United  States 
Money 

273.6928 

916§ 

250.8851 

$10.8046 

136.8464 

916f 

125.442<, 

5.4023 

54.7385 

916§ 

50.1770 

2.1609 

27.3692 

916§ 

25.0885 

1.0804 

SILVER  COINS. 

Gross  Weight             Fineness 
(Grains)           (Thousandths) 

Pure  Silver 
(Grains) 

Value  in 
United  States 
Money 

385.8089 
192.9044 
77.1617 
38.5808 
19.2904 

916§ 
916§ 
916^ 
916f 
916| 

353.6581 
176.8290 
70.7316 
35.3658 
17.6829 

$1.0804 
.5402 
.2402 
.1080 
.0540 

silver  pieces 

have  been 

withdrawn. 

Silver    is    legal 

Denomination 
Crown 
Half  Crown 

(5  Milreis) 
Fifth  Crown 

(2  Milreis) 
Tenth  Crown 

(1  Milreis) 


Denomination 

1000  Reis 

500  Reis 

200  Reis 

100  Reis 

50  Reis 


tender  only  to  the  amount  of  5  milreis,  but  by  Lisbon  commercial  usage 
one-third  of  all  payments  is  accepted  in  that  money. 

MINOR  COINS. 


Gross  Weight 

Denomination 

Composition             (Grains) 

Legal  Tender         Value 

100  Reis  (Nickel) 

j  75%  copper  and     61.7294 

$0.  1080 

50  Reis  (Nickel) 
20  Reis  (Bronze) 

1  25%  nickel              38.5807 
(96%  copper            185.1882 

To  the  amount 
of  inn  Roi<;      -021<> 

10  Reis  (Bronze) 

\     2%  tin  and            92.5941 

-1S-      .0108 

5  Reis  (Bronze) 

(    2%  zinc                   46.2970 

.0054 

Money  of  Portuguese  India. 

The  decree  of  December  22,  1895,  published  June  28,  1902, 
provided  for  the  coinage  and  issue  of  the  following  minor  coins: 


Denomination 
Half  tanga 
Fourth  tanga 
Eighth  tanga 
Twelfth  tanga 

Gross  Weight 
(Grains) 

200.6204  1 
96.4521  i 
50.1551  f 
33.3339  j 

Composition 


c°PPer>  2%  tin  and  2%  zinc- 


Money  of  Roumania. 

Unit:     Lei=100  Bani 

(Table  of  weights  of  money,  same  as  France.) 

The  laws  of  April  14,  1867,  and  April  30,  1879,  introduced 
the  system  of  the  Latin  Union  into  Roumania,  the  franc  being 
called  the  lei,  and  the  centime  the  bani;  but  in  1890  a  measure 
was  passed  by  the  Roumanian  Chamber  abrogating  the  double 
standard  and  substituting  fcr  it  the  single  gold  standard,  with 
the  subsidiary  silver  coinage  having  a  paying  power  to  the  amount 
of  50  lei  or  francs. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  27 

The  actual  value  of  the  gold  lei  in  the  money  of  the  United 
States,  as  declared  by  the  Director  of  the  United  States  mint, 
is  19  and  3-10  cents  ($0.193).  The  commercial  value  of  the  lei 
in  the  United  States  fluctuates  according  to  the  demand  for 
checks  and  drafts  on  Roumania,  and  the  supply  of  such  exchange 
in  the  market. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  with  the  we'ght,  fineness,  etc.,  of  coins,  and  the 
approximate  equivalent  value  in  United  States  money,  are  as 
follows: 

PAPER  MONEY. 

Notes  issued  by  the  Banque  Nationale  de  Roumanie,  20  Lei  ($3.86), 
100  Lei  ($19.30),  1000  Lei  ($193.00).  These  NOTES  are  payable  on 
demand  by  said  bank  in  the  following  gold: 

In  20-Mark  (German)  pieces  at  ...  24  Lei,  70  Bani  each. 

In  Sovereigns  (Eng.)  at 25  Lei,  22  Bani  each. 

In  Ducats  (Aus.-Hung.)  at 11  Lei,  75  Bani  each. 

In  Napoleons  (French)  at 20  Lei,  00  Bani  each. 

In  Imperials  (Russian)  at 20  Lei,  60  Bani  each. 

The  5  and  10  lei  notes  issued  by  the  Government  have  been  with- 
drawn and  are  now  valueless.  The  discount  on  Roumanian  notes  in 
Paris  is  about  £%. 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

20  Leis  99.5635  900  89.6072  $3.8590 

10  Leis  49.7817  900  44.8036  1.9295 

5  Leis  24.8908  900  22.4018  .9647 

SILVER  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Silver  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

5  Leis  385.8089  900  347.2280  $0.9647 

2  Leis  154.3235  835  128.8601  .3858 

1  Lei  77.1617  835  64.4300  .1929 

J  Lei  38.5808  835  32.2150  .0965 

These  silver  coins  do  not  circulate  in  Latin  Union  countries  but  are 
negotiable  in  Paris  at  a  discount  of  about  5%. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

10  Bani  (95<7coDDer         154.3235]  $0.0192 

5  Bani  J  9%&  f£?Z%          77 .  1 6 1 7  [  To  the  amount          .  0096 

1  Bani 


JDEUll  J        *m    A;  J  i  i   .  AUi  i     i     i  \j  nuc  BUlVUUli  .  UU»U 

Bani  1     *#2  30.8647  f      of  5  Lei.  .0038 

Bani  1/0™!  15. 4323  J  .0019 


There  are  also  5,  10  and  20-bani  pieces  of  nickel,  the  weight,  fineness, 
etc.,  of  which  we  have  no  data. 


28  FOREIGN  EXCHANGE  TEXT  BOOK 

Money  of  Servia. 

Unit:     Dinar=100  Paras 
(Table  of  weights  of  money,  same 'as  France.) 

Servia  adopted  the  decimal  system  of  coinage  agreed  upon 
at  Paris  in  1865,  between  France,  Italy  and  Switzerland.  The 
unit  of  value  is  the  dinar  of  100  paras.  The  actual  currency  of 
the  country'  is  inconvertible  paper.  Gold  is  usually  at  a  premium, 
the  average  amount  of  such  premium  during  year  1903  being 
1  per  cent. 

The  actual  value  of  the  gold  dinar  in  the  money  of  the  United 
States  is  19  and  3-10  cents  ($0.193).  The  dinar  has  no  com- 
mercial value  as  exchange  in  the  United  States,  since  exchange 
on  that  country  is  usually  drawn  in  French,  English,  or  German 
money,  payable  at  Paris,  London  or  Berlin  respectively. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  with  the  weight,  fineness,  etc.,  of  coins  and  the  ap- 
proximate equivalent  value  in  the  money  of  the  United  States, 
are  as  follows: 


PAPER  MONEY. 

Notes  issued  by  the  National  Bank  of  Servia  as  follows:  50  Dinar 
($9.65),  100  Dinar  ($19.30),  payable  in  gold,  and  10  Dinar  ($1.93) 
payable  in  silver. 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

(Grains)  (Thousandths)  (Grains) 


Denomination 
20  Dinars 

( Milan  d'Or.) 
10  Dinars 


99.5635 
49.7817 


900 
900 


89.6071 
44.8035 


Money 

$3.8590 
1.9295 


SILVER  COINS. 


Denomination 
5  Dinars 
2  Dinars 
1  Dinar 

50  Paras 


Gross  Weight 
(Grains) 

385.8089 

154.3235 

77.1617 

38.5808 


Fineness 
(Thousandths) 

900 
835 
835 
835 


Pure  Silver 
(Grains) 

347.2280 

128.8601 

64.4300 

32.2150 


Value  in 

United  States 
Money 

$0.9647 
.3859 
.1929 
.0964 


500  dinars  constitute  a  legal  tender  for  5  dinar  pieces  and 
50  dinars  for  the  rest  of  the  silver  coinage? 


MINOR  COINS. 


Denomination  Composition 

20  Paras  (Nickel) 

10  Paras  (Nickel) 
5  Paras  (Nickel) 

10  Paras  (Bronze)  f  95%  copper, 
5  Paras  (Bronze)  •<  4%  tin  and 
1  Para  (Bronze)  [  1%  zinc 


Gross  Weight 
(Grains) 


Legal  Tender 


QO      KQdl      f 

75%  copper  and  ^ '  2^94  J  To  amount  of 
25%  nickel  .~ '  on,n  |      5  Dinar. 


-7   1R17  j  To  the  amount 
is:  1323         of  l  Dinar' 


Value 
0.0385 
.0192 
.0096 


.0096 
.0019 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


29 


Money  of  Spain. 

Unit:     Peseta=100  Centimes 
(Table  of  weights  of  money,  same  as  France.) 

In  1868  Spain  adopted  the  monetary  system  of  the  Latin 
Union  and  is  therefore  bi-metallic,  with  the  silver  peseta,  equiva- 
lent to  the  French  franc,  as  monetary  unit.  The  ratio  of  gold  to 
silver  is  1  to  15£.  Gold  and  the  5  peseta  .piece  are  unlimited 
legal  tender,  while  silver  coins  of  less  value  than  5  pesetas  are 
legal  tender  for  only  50  pesetas. 

As  gold  is  at  a  premium  in  comparison  with  silver  and  with 
bank  notes,  it  does  not  circulate  in  this  country.  The  Bank  of 
Spain  keeps  it  in  safes  in  guarantee  of  its  notes  issued.  During 
1903,  gold  was  at  a  premium  of  as  high  as  37.30  per  cent,  and  at 
times  as  low  as  30J  per  cent,  but  the  average  premium  was 
34.60  per  cent. 

The  actual  value  of  the  gold  peseta  in  the  money  of  the 
United  States,  as  declared  by  the  Director  of  the  United  States 
mint,  is  19  and  3-10  cents  ($0.193).  The  commercial  value  of 
the  peseta  in  the  United  States  fluctuates  according  to  the  demand 
for  drafts,  checks  and  bills  of  exchange  on  Spain  and  the  supply  of 
such  exchange  in  the  market  for  sale.  More  often,  however, 
exchange  on  Spain,  owing  to  great  fluctuations,  is  drawn  in 
French,  English  or  German  money,  and,  therefore,  at  such  time 
the  peseta  has  no  commercial  value  in  the  United  States. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  with  the  weight,  fineness,  etc.,  of  coins  and  their 
equivalent  values  in  United  States  money,  are  as  follows: 

PAPER  MONEY. 

Notes  issued  by  the  Banco  d'Espana,  25  Pesetas  ($4.82),  50  Pesetas 
($9.65),  100  Pesetas  ($19.30),  500  Pesetas  ($96.50),  1000  Pesetas  ($193.00). 


GOLD  COINS. 


Denomination 

100  Pesetas 
50  Pesetas 
25  Pesetas 
20  Pesetas 
10  Pesetas 
5  Pesetas 


Gross  Weight            Fineness               Pure  Gold 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

497.8178 

900 

448.0360 

$19.2952 

248.9089 

900 

224.0180 

9.6476 

124.4543 

900 

112.0089 

4.8238 

99.5635 

900 

89.6072 

3.8590 

49.7817 

900 

44.8036 

1.9295 

24.8908 

900 

22.4018 

.9647 

SILVER  COINS. 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

385.8089 

900 

347.2280 

$0.9647 

154.3235 

835 

128.8607 

.3859 

77.1617 

835 

64.4300 

.1929 

38.5808 

835 

32.2150 

.0964 

15.4323 

835 

12.8860 

.0386 

Denomination 

5  Pesetas 

2  Pesetas 

1  Peseta 
50  Centimes 
20  Centimes 

All  the  silver  coins  now  in  circulation  were  coined  since  1868. 
issued  previous  to  that  date  are  not  now  accepted. 


Coins 


30  FOREIGN  EXCHANGE  TEXT  BOOK 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

(Bronze.) 

lOCentimos  f  QW  Ponnpr  154. 3235  f  $0.0192 

5  Centimes  yj$>  2      ^  77 . 1617  J  To  the  amount  .  0096 

2  Centimes  *ff  ;  30.8647]      of  5  Pesetas.  .0038 

1  Centime  (    1 /0  z  15. 4323  (  .0019 


Money  of  Turkey  and  Syria. 
Unit:     Piastre=40  Paras 

1  Para=3  Aspes. 
(100  Piastres=l  Turkish  Pound.) 

Table  of  Weights  of  Money. 

4  grains    =1  carat 
16  carats    =1  dram 
100  drams   =1  Cheky 
400  drams   =1  Oko 

The  actual  value  of  the  gold  piastre  in  the  money  of  the 
United  States  as  declared  by  the  Director  of  the  United  States  mint, 
is  4  and  4-10  cents  (SO. 044).  The  100-piastre  piece  is  called 
the  Turkish  pound  or  medjidie,  or  lira,  which  in  United  States 
money  is  worth  $4.396,  or  considerably  less  than  the  English 
pound.  In  exchange  transactions  between  the  United  States 
and  this  country  it  is  customary  to  draw  such  exchange  in  Turkish 
pounds,  the  commercial  value  of  which  fluctuates  according  to  the 
supply  and  demand. 

The  financial  institutions  of  Turkey  are  almost  entirely 
in  the  hands  of  foreigners.  The  Turkish  pound  is  a  coin  slightly 
lighter  than  the  English  sovereign,  but  of  the  same  fineness.  They 
are  worth  in  London  from  17  shillings  6  pence  to  18  shillings  each. 
Merchants  retain  as  far  as  possible  the  20  piastre  pieces  and  the 
pound  gold  pieces  to  make  their  own  payments,  therefore  the 
latter  are  at  a  premium,  usually  about  8  per  cent,  with,  a  fluctua- 
tion of  %  per  cent  above  and  below  8  per  cent.  For  example, 
upon  April  1st,  1903,  the  premium  for  pound  pieces  was  as  follows: 
The  20  piastre  (medjidie)  pieces  were  worth  108  5-40ths  piastres 
per  pound.  The  5  piastre  (J  medjidie)  pieces  were  worth 
107  30-40ths  piastres  per  pound.  Smaller  silver  pieces  were 
worth  104  10-40ths  piastres  per  pound. 


PAPER  MONEY. 

No  paper  money  is  issued  by  banks  or  the  Government.     French  and 
English  paper  money  is  in  circulation. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


31 


GOLD  COINS. 


Gross  Weight 
(Grains) 


Denomination 

500  Piastres 

(5  Lire  or  Pounds)  556 . 8302 
250  Piastres 

( 2  J  Lire  or  Pounds)  278.4151 
100  Piastres 

( 1  Lira  or  Pound)  111.  3660 
50  Piastres 

( i  Lira  or  Pound)  55 .  6830 
25  Piastres 

(J  Lira  or  Pound)          27.8415 


Fineness 
(Thousandths) 


Pure  Gold 
(Grains) 


Value  in 

United  States 

Money 


916$ 


510.4277 

$21.9822 

255.2138 

10.9911 

102.0855 

4.3964 

51.0422 

2.1982 

25.5213 

1.0991 

SILVER  COINS. 


Gross  Weight             Fineness               Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

371.2253 

830 

308.1170 

$0.8793 

185.6126 

830 

155.0585 

.4396 

92.8063 

830 

77.0292 

.2198 

37.1225 

830 

30.8117 

.0879 

18.5612 

830 

15.4058 

.0439 

s)     9.2806 

830 

7.7029 

.0219 

Denomination 

20  Piastres 

10  Piastres 

5  Piastres 

2  Piastres 

1  Piastre 


By  a  decree  the  Government  lowered 
piece  to  19  piastres  in  consequence  of  which 
is  worth  108  piastres. 

MINOR  COINS. 


the  value  of  the   20-piastre 
debasement  the  gold  pound 


Denomination 
BRONZE. 

1  Piastre  (40  Paras) 
$  Piastre  (20  Paras) 

\  Piastre  (10  Paras) 
£  Piastre  (  5  Paras) 
4\j  Piastre  (  1  Para) 


Gross  Weight 
Composition  (Grains)         Legal  Tender 


/  Fine  copper 
\Fine  copper 
[  95%  copper, 
J  3%  tin, 


330.0363 
165.0181 
82.5090  [ 
41.2545  f 


No  data. 


1J%  lead  and    8.2501 
zinc 


Value 

$0.0439 
.0219 
.0109 
.0055 
.0011 


Pieces  known  as  becklik  and  half-becklik  and  altilik  and  half-altilik, 
of  copper,  are  also  issued. 

Syria  and  the  Holy  Land. 

This  country  is  said  to  be  a  land  of  bandits,  where  travelers 
must  be  accompanied  by  armed  guards.  It  is  a  dependency 
of  Turkey  and  the  Turkish  authorities  preserve  the  peace  between 
the  warring  factions  of  the  Christian  Churches.  The  most 
acceptable  coins  for  travelers  to  use  are  the  French  gold.  Bank 
notes  are  generally  at  a  discount.  In  the  Holy  Land,  French 
and  English  gold  coins  arc  ."preferred.  Commercial  accounts 
in  Syria  are  usually  expressed  in  francs,  and  the  following  esti- 
mate of  values  of  coins  which  are  current  in  Holy  Land  (Jeru- 
salem, Beyrout  and  Damascus)  are  given: 

Xapoleon  (French)  equal  to 20  Francs. 

Sovereign  (Eng.)  equal  to 25  Francs    9  centimes. 

Turkish  Pound  equal  to 22  Francs  90  centimes. 

Medijie  (Silver)  equal  to 4  Francs  22  centimes. 


3'2  FOREIGN  EXCHANGE  TEXT  BOOK 

Money  of  Ireland,  Scotland  and  Wales. 

(Same  as  Great  Britain.) 

ASIATIC  COUNTRIES. 

The  Orient. 

"The  Orient"  is  the  term  usually  denoting  the  countries  from 
Singapore,  Straits  Settlements,  to  Japan  and  would  include  the 
East  Indies  (Java,  Sumatra  and  Borneo),  Cochin  China,  the 
Straits  Settlements,  the  Philippine  Islands,  China  and  Japan. 
India  is  an  Oriental  country,  but  the  term  "Orient"  does  not 
apply  to  it.  The  term  "Far  East"  can  also  be  considered 
synonymous  with  "Orient." 

The  trade  of  the  Orient  is  based  on  silver,  not  gold,  and 
the  two  currencies  are  the  British  trade  dollar  and  the  Mexican 
dollar  (old  die).  The  great  Oriental  banks  issue  bank  notes, 
these  notes  being  payable  either  in  "local  currency"  i.  e., 
British  trade  dollars  or  Mexican  dollars.  Drafts  drawn  payable 
in  China  should  be  made  payable  in  local  currency.  If  pay- 
ment is  demanded  in  Mexican  dollars  the  payee  will  be  com- 
pelled to  pay  a  premium  on  same  according  to  the  day's  rate. 
Japan,  however,  has  recently  adopted  the  gold  standard. 

The  largest  Oriental  Banks  are  the  Hong  Kong  and  Shanghai 
Banking  Corporation  and  the  Chartered  Bank  of  India,  Australia 
and  China,  controlled  by  English  capital,  the  Deutsche- Asiatische 
Bank,  controlled  by  German  capital,  the  Russo-Chinese  Bank, 
controlled  by  Russian  capital,  and  the  International  Banking 
Corporation,  controlled  by  American  capital.  The  fir^t  two 
are  at  present  the  only  note-issuing  banks  of  importance,  but  the 
International  Banking  Corporation  expect  to  issue  notes  soon. 
The  Yokohama  Special  Bank  is  controlled  by  Japanese  capital. 

Money  of  British  India  and  Burmah. 

Unit:    Rupee  =16  Annas 

1  Anna=  4  Pice 
1  Pice  =  3  Pie 

Table  of  Weights  of  Money. 

4  Punks  =1  Dhan 

4  Dhans  =1  Ruttee 

8  Ruttees  =1  Masha 

12  Mashas  =1  Tola 

1  Tola  =180  Grains 

British  India  is  under  British  military  and  civil  rule.  The 
unit,  the  silver  rupee,  is  a  coin  about  the  sue  of  a  United  States 
silver  50-cent  piece.  With  the  depreciation  of  silver  there  has 
been  violent  fluctuations  in  its  value.  When  silver  was  worth 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  33 

four  shillings  (Eng.)  per  ounce  ($1.00)  the  value  of  the  rupee  was 
considered  to  be  2  shillings  (Eng.)  or  about  50  cents  United 
States  money,  but  with  the  fall  of  silver,  the  rupee  fell  to  the 
value  of  about  1  shilling  (25  cents),  and  for  some  years  was 
subject  to  considerable  changes,  much  to  the  disarrangement 
of  Anglo-Indian  commerce.  The  Government,  however,  has 
taken  steps  to  steady  the  value  of  the  rupee  and  has  succeeded 
in  maintaining  the  value  from  about  31  cents  to  33  cents,  or 
1  shilling  3  pence  to  1  shilling  4  pence,  English  money.  The 
price  of  the  rupee  may  be  ascertained  by  noticing  the  quotations 
for  the  sale  of  rupee  paper,  i.  e.,  bills  of  exchange  and  telegraphic 
transfers  offered  by  the  Indian  Government  through  the  Bank  of 
England,  London. 

The  circulating  mediums  among  foreigners  are  paper  and 
silver. 

The  actual  value  of  the  rupee  in  the  money  of  the  United 
States  fluctuates  according  to  the  price  of  silver.  The  commercial 
value  of  the  rupee  in  the  United  States  fluctuates  according  to 
the  demand  for  drafts,  checks  and  bills  of  exchange  on  India  and 
the  supply  of  such  exchange  in  the  market  for  sale.  Very  fre- 
quently exchange  on  India  is  drawn  in  English  money  (pounds 
sterling)  "at  exchange"  on  London,  and  when  so  drawn  the 
price  depends  upon  the  price  of  English  exchange. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  with  the  weight,  fineness,  etc.,  of  coins,  and  their 
approximate  equivalent  value,  as  estimated  by  the  Director  of 
the  United  States  mint,  are  as  follows: 

PAPER  MONEY. 

Notes  are  issued  by  the  various  Presidencies,  a  slight  discount  being 
charged  as  exchange  for  the  notes  of  one  Presidency  cashed  in  another. 
The  denominations  are  of  5  rupees  and  upwards  to  10,000  rupees,  the 
value  of  which  may  be  estimated  at  about  33  cents  United  States 
money  per  rupee. 

GOLD  COINS. 

The  standard  coin  of  India  is  the  sovereign  (English  pound)  but  the 
rupee  is  the  money  of  account  current  at  15  rupees  to  the  sovereign.  The 
gold  coins  are  the  5  rupee,  J  mohur  ($1.62);  10  rupee,  §  mohur  ($3.25); 
mohur,  15  rupees  ($4.87);  double  mohur,  30  rupees  ($9.74). 

These  gold  coins  ceased  to  circulate  as  currency  since  1835.  Though 
a  certain  number  were  struck  in  the  mints,  more  or  less  regularly,  down 
to  a  recent  period,  they  were  not  intended  for  circulation  but  for  use  as 
ornaments,  to  hoard,  or  for  the  sake  of  .the  mint  mark  to  verify  the 
standard  of  the  gold  when  offered  for  sale  by  goldsmiths  and  bullion 
dealers  in  the  same  way  in  which  rupees  were  preferred  to  uncoined 
silver  for  conversion  into  ornaments.  Such  coinage  has  gradually 
declined  with  the  importation  of  gold  bars,  bearing  recognized  marks,  and 
for  many  years  the  few  mohurs  which  had  been  coined  have  been  struck 
as  specimens.  In  future  they  will  not  be  a  part  of  the  Indian  monetary 
system. 


34  FOREIGN  EXCHANGE  TEXT  BOOK 

SILVER  COINS. 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

Denomination 

(Grains) 

(Thousandths) 

(Grains) 

Money 

Rupee 

180.0030 

916§ 

165.0027 

$0.3244 

Half-Rupee 

90.0015 

9161 

82.5013 

.  1622 

Quarter-Rupee 

45.0007 

916§ 

41.2506 

.0811 

Eighth-Rupee 

22.5003 

916§ 

20.6253 

.0405 

Rupees  and  half  rupees  are  full  legal  tender  in  payment  or  on 
account  side  by  side  with  the  gold  sovereign  at  the  rate  of  15  rupees  to 
the  sovereign. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

2  Pice  or  \  Anna  200.0000]  $0.0101 

1  Pice  or  |  Anna  100.  0000  (  To  the  amount  .0050 

i  Pice  or  $  Anna  50  .  0000  ]      of  1  Rupee.  .  0025 

1  Pice  or  1-1  2  Anna  33.33331  .0016 


Money  of  China. 
New  Unit:     Dollar =100  Cents 
Money  Table. 

10  cash  or  li  =1  candareen 

10  candareens  or  fun  or  fen  =1  mace 

10  mace  or  tsien  =1  tael  or  liang 

The  cash  or  li  (also  called  "sin"  and  by  the  Dutch  "pitjes") 
is  represented  by  an  actual  coin,  but  the  candareen,  the  mace 
and  the  tael  are  simply  denominations  denoting  certain  fixed 
weights  of  silver. 

While  the  monetary  unit  of  China  is  a  silver  dollar  of  100 
cents  the  money  most  used  is  called  a  "tael,"  which  is  not  u 
coin,  but  silver  molded  into  cup-shaped  ingots  called  "shoes," 
or  "sycee"  by  the  foreigners  and  "yentzu"  or  "yenliang"  by  the 
natives.  A  tael  is  a  weight  supposed  to  be  an  ounce  and  by 
the  natives  is  called  a  "liang."  A  tael  or  ounce  of  silver 
varies  in  weight  as  well  as  in  value  in  the  different  localities. 
The  Shanghai  tael,  the  Tientsin  tael,  the  Pekin  tael,  the 
Chefoo  tael,  the  Hankow  tael  and  all  other  taels  are  specified 
local  weights. 

The  Shanghai  currency  consists  of  shoes  (or  sycee)  of 
silver  of  about  50  taels  weight  each.  These  ingots  are  rendered 
current  by  the  "hong  koo"  who  assays  the  metal  and  affixes 
to  each  ingot  assayed  by  him  a  stamp  recording  the  "touch" 
or  degree  of  purity.  The  hong  koo  is  not  an  official  appointed 
by  the  Chinese  Government,  but  derives  his  authority  entirely 
through  an  arrangement  among  the  native  bankers.  According 
to  the  stamp  affixed  by  him  on  each  shoe  the  "compradores," 
who  are  either  partners  or  trusted  and  well  paid  employees  of 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  35 

business  houses,  add  from  0  up  to  3  taels  Shanghai  weight  per 
50  taels  of  actual  weight.  This  addition  thus  ranges  from  0 
for  silver  of  the  hong  koo's  standard  up  to  6  per  cent  for  pure 
silver  of  100  toques  or  touch.  A  further  addition  of  2  per  cent 
is  made  in  conformity  with  an  old  custom  of  long  standing. 
From  these  data  it  is  easy  to  deduce  the  touch  or  purity  of 
Shanghai  sycee,  or  more  properly  speaking,  of  sycee  silver 
calculated  in  the  actual  weight  represented  by  it  in  Shanghai 
taels  of  account. 

100  taels,  pure  silver,  plus  6% 106. 00 

2%  added 2. 12 


Shanghai  tael  of  account 108. 12 

The  so-called  Haikwan  or  Customs  tael,  which  is  produced  at 
the  Customs  Bank,  by  melting  and  refining  the  Mexican, 
Spanish  and  other  foreign  dollars  received  in  payment  of  duties, 
commands  a  premium  over  the  dollars  currency,  ranging  from 
3  to  10  per  cent,  according  to  the  supply  and  demand  of  the 
two  commodities. 

At  Hong  Kong,  Canton  and  Fuchau,  chopped  dollars, 
which  are  simply  Mexican  dollars  chopped  or  stamped  by  the 
natives,  are  the  circulating  medium,  and  in  all  payments  it  is 
the  custom  for  them  to  be  examined  and  weighed  at  the  rate  of 
717  taels,  Canton  weight,  per  $1,000.  At  Foochow  chopped 
dollars  of  the  lowest  description  pass  current,  but  at  Hong  Kong 
and  Canton  only  fairly  good  chopped  dollars  are  taken  at  par. 

At  Amoy,  accounts  are  kept  in  currency  dollars  weighed 
at  720  taels,  Canton  weight,  per  $1,000. 

At  these  four  ports  clean  and  unchopped  Mexican  dollars 
usually  command  a  small  premium  in  the  market,  and  when 
sold  at  a  premium  are  counted  instead  of  weighed. 

The  following  are  the  approximate  average  weights  of  the 
various  descriptions  of  dollars  circulating  at  these  Chinese  ports: 

Japanese  trade  dollar 400  troy  grains. 

Japanese  yen  or  dollar 416  troy  grains. 

Hong  Kong  dollar 416  troy  grains. 

Mexican  dollar,  about 416  J  troy  grains. 

Carolus  or  Spanish  dollar,  about 414    troy  grains. 

The  value  in  English  money  (pounds  sterling)  of  the  above 
dollars  depends  upon  the  price  of  bar  silver  in  London,  and  has 
ranged  in  past  years  from  3  shillings  6  pence  to  4  shillings  6 
penc.e.  Sycee  and  bar  silver  are  dealt  in  at  these  ports  at  a 
variable  premium,  the  par  being  taken  at  717  taels,  Canton 
weight,  equal  to  $1,000. 

Silver  dollars,  although  coined  and  in  use,  are  not  very 
popular  except  at  the  port  cities.  They  bear  the  name  of  the 


36  FOREIGN  EXCHANGE  TEXT  BOOK 

provinces  by  which  issued,  and  although  supposed  to  be  of 
uniform  weight  and  fineness  are  more  frequently  refused  than 
accepted  outside  of  those  provinces. 

Up  to  the  present  time  the  Chinese  Government  has  not 
attempted  to  issue  paper  money  and  there  are  no  gold  coins. 
Gold  is  sold  as  a  commodity  in  little  bars  of  great  fineness, 
weighing  from  an  ounce  to  five  or  six  ounces.  They  are  pretty 
in  appearance  and  bear  in  small  characters  the  name  of  the  shop 
that  has  tried  them  down. 

Bank  notes  are  issued  in  the  principal  cities,  varying  in 
amount  from  500  to  10,000  "cash,"  but  like  the  silver  notes 
are  much  counterfeited  and  have  only  local  circulation. 

A  coin  called  "cash,"  or  "li,"  made  from  an  alloy  of  copper, 
iron  and  tin,  is  extensively  used.  The  coins  are  about  the  size 
of  the  United  States  quarter  dollar  (25-cent  piece)  with  a  square 
hole  in  the  center  for  stringing  them.  They  are  generally  con- 
sidered worth  in  United  States  money  about  one-tenth  of  a  cent 
or  about  1,000  to  the  United  States  dollar.  They  are  usually 
strung  in  lots  of  500  or  1,000  with  knots  between  each  100 
for  easier  calculation. 

This  coin  has  impressed  thereon  Chinese  characters  stating 
the  reign,  etc. ;  on  the  reverse,  Mantchu  characters,  stating  the 
name  of  the  mint.  Originally  they  represented  one  one- 
thousandths  part  of  a  tael,  and  nominally  they  continue  to 
do  so  to  the  present  day;  but  they  have  long  since  ceased 
to  keep  up  a  corresponding  metallic  value.  Not  long  ago  it 
required  from  1,600  to  1,800  of  these  coins  to  make  up  the 
value  of  a  tael. 

The  actual  value  of  the  Chinese  silver  dollar  in  the  money 
of  the  United  States  varies  according  to  the  price  of  silver.  In 
exchange  transactions  between  the  United  States  and  China, 
drafts,  checks  and  bills  of  exchange  are  usually  drawn  in  "dollars 
local  currency"  at  exchange  upon  Hong  Kong,  although  not 
infrequently  such  exchange  is  drawn  in  English  money  at 
exchange  on  London. 

Silver  pesos  or  dollars,  known  as  the  "Mexican"  dollar, 
are  in  general  circulation  at  the  seaport  cities  and  to  some 
extent  in  other  cities. 

The  paper  currency,  and  gold,  silver  and  minor  coins  in 
circulation  and  their  approximate  equivalents  in  United  States 
money  are  as  follows: 

PAPER  MONEY. 

Notes  issued  by  the  Hong  Kong  and  Shanghai  Banking  Corporation, 
at  Hong  Kong  in  dollars  of  denominations  of  1,  5,  10,  50  and  100  dollars; 
at  Shanghai  and  Tientsin,  in  both  dollars  and  taels,  in  denominations  of 
1,  5,  10,  50  and  100.  Notes  issued  by  the  Chartered  Bank  of  India, 
Australia  and  China,  at  Hong  Kong,  in  dollars,  in  denominations  of  5, 
10,  50,  100  and  1,000;  at  Shanghai  in  both  dollars  and  taels  in  denomi- 
nations of  5,  10,  50  and  100,  and  at  Shanghai  in  1  dollar  denomination. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  37 

Notes  issued  by  the  Banque  de  1'Indo-China  at  Shanghai  in  dollars  in 
denominations  of  1,  5,  10  and  100.  Notes  issued  by  the  Russo-Chinese 
Bank  at  Shanghai  in  dollars  in  denominations  of  1,  5  and  10.  Notes 
issued  by  the  Yokohama  Specie  Bank,  at  Shanghai,  Tientsin  and  Niu- 
chwang  in  dollars  in  denominations  of  1,  5  and  10. 

GOLD  COINS. 
There  are  no  gold  coins  in  circulation  except  those  of  other  countries. 

SILVER  COINS. 

The  Viceroys  of  Canton  and  Nanking  mint  dollars  in  small  amounts 
but  they  are  only  accepted  by  banks  at  considerable  discount.  British 
dollar  ($0.502,  value  January  1,  1906),  Mexican  dollar  ($0.505  value 
fanuary  1,  1906).  The  demand  for  Mexican  dollars  is  such  that  they  are 
usually  at  a  premium  of  from  £  to  2  per  cent,  fluctuating  daily.  At 
Shanghai,  tael  ($0.696  value  January  1,  1906).  This  is  not  a  coin,  but  a 
weight  of  silver.  The  Mexican  dollar  circulates  at  Shanghai,  from  73  to 
76  taels  being  worth  100  Mexican  dollars.  The  subsidiary  silver  coins 
are  5  cents,  10  cents,  20  cents  and  50  cents.  The  table  of  weights  for 
money  at  Shanghai  is:  10  cash  equal  1  mace;  10  mace  equal  1  candareen; 
10  candareens  equal  1  tael.  The  British  (Hong  Kong)  silver  5-cent  piece 
is  equal  to  36  candareens;  the  10-cent  piece,  72  candareens,  and  the 
20-cent  piece,  1  mace.  The  silver  coins  of  the  province  Kwantung  are 
refused  by  banks  and  by  the  government,  but  circulate  to  a  considerable 
extent  locally.  In  large  native  transactions  ingots  of  silver  form  the 
medium  of  exchange.  These  ingots  are  called  "  shoes "  from  some 
fancied  resemblance  in  shape.  They  range  in  weight  from  a  half-tael  to 
100  taels. 

MINOR  COINS. 

Coins  called  "  cash  "  which  are  described  on  page  36  are  in  general 
circulation  among  the  natives. 

^ 
Money  of  Japan. 

Unit:     Yen=100  Sen 
iSen     =10  Rin 

Table  of  Weights  of  Money. 

10  Shis  =1  Rin 
lORins  =1  Fun 
10  Funs  =1  Momme 

In  1897  Japan  adopted  the  single  gold  standard  with  the 
yen  of  100  sen  as  the  monetary  unit.  Gold  coins  are  full  legal 
tender,  silver  coins  to  the  amount  of  10  yen  and  the  minor 
coins  to  the  amount  of  1  yen. 

The  actual  value  of  the  gold  yen  in  the  money  of  the 
United  States  as  declared  by  the  director  of  the  United  States 
mint  is  49  8-10  cents  ($0.498).  The  commercial  value  of 
the  yen  fluctuates  according  to  the  demand  for  drafts,  checks 
and  bills  of  exchange  on  Japan  and  the  supply  of  such  exchange 
in  the  market  for  sale.  The  paper  currency  and  gold,  silver 
and  minor  coins  in  circulation  with  the  weight,  fineness,  etc.,  of 
the  coins,  and  the  approximate  value  in  the  money  of  the 
United  States,  are  at  follows: 


38  FOREIGN  EXCHANGE  TEXT  BOOK 

PAPER  MONEY. 

Notes  issued  in  denominations  of  1,  5,  10,  25,  50,  100  and  500  yen. 
The  value  of  the  gold  yen  in  United  States  money  is  49  8-10  cents 
($0.498). 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

20  Yen           257.2033      900  231.4830  $9.9691 

10  Yen           128.6024      900  115.7422  4.9845 

5  Yen            64.3004      900  57.8704  2.4922 

lYen(*)         12.8602      900  11.5742  .4984 

(*)  Not  coined. 

SILVER  COINS. 

Ornss  \Voifrl 

Denomination 
50  Sen 
20  Sen 
10  Sen 

The  silver  1-yen  coins  issued  under  the  monetary  law  of  1871  are  to 
be  gradually  exchanged  for  gold  coins  at  the  rate  of  1  gold  yen  for  1 
silver  yen.  Notice  of  suspension  of  these  coins  is  to  be  given  six  months 
in  advance,  and  any  not  presented  for  exchange  within  5  years  are  to  be 
treated  as  bullion.  The  old  5-yen  silver  coins  are  to  continue  in  circu- 
lation. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)         Legal  Tender  Value 


Gross  Weight 
(Grains) 

Fineness 
(Thousandths) 

Pure  Silver 
(Grains) 

Value  in 
United  States 
Money 

208.0019 

800 

166.4015 

$0.2492 

83.2020 

800 

56.5616 

.0996 

41.5979 

800 

33.2783 

.0498 

c  e~«  f   -~i  ~i\        J  75%  copper  and        -,    nn0i  1  $0.0245 

5  Sen  (nickel)        {  0(.<C?  „    £,  71.9981 


[  To  amount 

1  Sen  (bronze)      {  9^%  fPfP^'  1 10 .  0018  I       !  Yen"  .  0049 

5Rin         "  4%  tin  and  55.0009  .0024 

(    -1  /o  zinc  j 

Money  of  Afghanistan  and  Baluchistan. 

These  countries  use  practically  the  same  monetary  system 
as  India.  Their  coinage  is  very  small  and  there  are  compara- 
tively no  exchange  transactions  with  the  United  States.  Russian 
and  British  coins  circulate  in  Afghanistan. 

Money  of  Ceylon. 
Unit:     Rupee=100  Cents 

The  value  of  the  silver  rupee  in  the  money  of  the  United 
States  fluctuates  according  to  the  price  of  silver.  In  exchange 
transactions  with  the  United  States,  drafts,  checks  and  bills  of 
exchange  would  be  drawn  either  in  English  money  or  that  of 
India,  at  exchange  on  London,  or  Bombay  or  Calcutta.  The 
money  in  circulation  consists  of  paper  currency  and  silver  and 
copper  coins.  No  gold  coins  are  used.  The  silver  coins  are 
10  cents,  25  cents  and  50  cents.  The  minor  coins  are  \  cent, 
1  cent  and  5  cents  of  copper.  100  of  these  copper  cents  are 
worth  about  444  cents  in  United  States  money. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  39 


Money  of  Dutch  East  Indies  (Islands). 

The  monetary  system  of  Java,  Sumatra  and  Borneo  is  the 
same  as  that  of  their  mother  country,  Holland  (The  Netherlands). 
Their  unit  is  the  florin  of  100  cents.  In  exchange  transactions 
with  these  countries,  drafts,  checks  and  bills  of  exchange  are 
usually  drawn  in  florins  or  Mexican  dollars. 


Money  of  Indo-China. 
Unit:     Piaster =100  Cents 

For  the  past  twenty  years,  Indo-China,  the  great  penin- 
sula between  India  and  China,  has  been  under  the  jurisdiction 
of  Cireat  Britain,  France,  Siam  and  a  few  native  chiefs.  The 
British  territory  is  made  up  of  Burmah  and  the  Straits  Settle- 
ments, which  are  under  East  Indian  administration.  However, 
Cochin-China,  Cambodia,  Anam  and  Tonquin  belong  to  France. 
The  northern  portions  of  the  peninsula  are  subject  to  native 
chiefs.  The  old  monetary  system  of  Indo-China  consisted  of 
sapecks,  mas  and  kwans;  60  sapecks  being  equal  to  1  mas 
and  10  mas  making  1  kwan. 

The  sapeck  was  a  small  zinc  or  pewter  coin  perforated  like 
the  Chinese  cash  or  li.  Gold  and  silver  taels  were  also  current 
in  Cochin-China.  The  silver  taels  were  worth  about  $1.55. 
Half  and  quarter  taels  were  also  used.  In  Cambodia  French 
5-franc  pieces  circulated  concurrently  with  Mexican  and 
Spanish  piastres. 

The  value  of  the  silver  piastre  in  the  money  of  United 
States  fluctuates  according  to  the  price  of  silver.  In  exchange 
transactions  between  this  country  and  United  States,  drafts, 
checks  and  bills  of  exchange  would  be  drawn  in  French  money  or 
Mexican  dollars.  The  money  in  circulation  consists  of  silver  and 
copper  coins.  No  gold  coins. 

July  5,  1905,  France  passed  the  following  monetary  law 
for  French  Indo-China:  The  French  piastre  of  commerce  and 
its  fractions  shall  henceforth  be  manufactured  of  the  fineness, 
weight,  etc.,  indicated  below: 

SILVER  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Silver  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

Piastre  416.6736  900  375.0062  $1.0101 

Half-Piastre 

(50  cents)  208.3368  900  187.5031  .5050 

Fifth-Piastre 

(20  cents)  83.3347  835  69  5844  .1874 

Tenth-Piastre 

(10  cents)  41.6673  835  34.7922  .0973 


40  FOREIGN  EXCHANGE  TEXT  BOOK 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)       Legal  Tender  Value 

1-100  Piastre  f    1%  zinc,  115  742fi  1  «n  mn 

( 1  cent)  4  95%  copper  and      l" '  'If-     (No  data) 

1  Sapeque  (Sapeck)         4%  tin 


Money  of  Persia. 

Unit:     Toman=10  Krans 

Table  of  Money. 

lOShabis  =1  Penebat 

2  Penebats  =1  Sahibghiran  or  Kran 

10  Krans  =1  Toman 

or  200  Shabis  =1  Toman 

* 

Table  of  Weights  of  Money. 

4  Gandums  =1  Xakhod 

4  Nakhods  =1  Dong 

6  Dongs  =lMiscal 

2  Miscals  =1  Dirken 

The  principal  coin  of  Persia  is  the  kran  of  silver,  the  value 
of  which  is  estimated  by  the  director  of  the  United  States  mint 
quarterly  each  year.  The  value  of  silver  krans  varies,  how- 
ever, greatly,  as  the  mints  of  the  country,  which  are  farmed 
out  for  a  yearly  sum,  are  not  considered  reliable.  The  fineness 
of  the  kran  oscillates  between  760  and  900-thousandths  fine. 
In  the  larger  transactions  the  toman  is  taken  as  a  unit,  reckoned 
equal  to  10  krans.  There  are  some  gold  tomans  and  half- 
tomans  in  existence,  but  they  are  not  the  standard.  They 
circulate  only  as  commercial  money  and  are  taken  by  weight. 
The  standard  is  silver. 

The  value  of  the  gold  toman  in  the  money  of  the  United 
States  as  declared  by  the  director  of  the  United  States  mint  is 
about  $1.704  and  of  the  silver  kran  about  8i  cents,  the  latter 
depending  upon  the  price  of  silver.  In  exchange  transactions 
drafts,  checks  and  bills  of  exchange  would  be  drawn  in  French, 
English  or  German  money.  The  money  in  circulation  consists  of 
paper  currency,  and  gold,  silver  and  copper  coins,  as  follows: 

PAPER  MONEY. 

Notes  issued  bv  the  Imperial  Bank  of  Persia  in  denominations  of  1, 
2,  3,  5,  10,  20,  25,  50,  100,  500  and  1,000  tomans. 

GOLD  COINS. 

Value  in 

\  Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

2  Tomans  87.962  900  79.166  $3.409 

1  Toman  43.981  900  39.583  1.704 


THE  MONETARY  SYSTEMS  OF  THE  WOKLD 


41 


SILVER  COINS. 

Pieces  of  5  krans,  2  krans,  1  kran,  half  kran  and  quarter  kran  are  in 
circulation,  but  we  have  no  data  as  to  weight,  fineness,  etc.  The  silver 
kran  is  estimated  at  present  price  of  silver  to  be  worth  about  8J  cents. 


MINOR  COINS. 


Denomination 
1  Abassi  (4  chais) 
2  Chais 
iChai 
Half  Chai  (pul.) 

Composition 

&.'**•" 

Gross  Weight 
(Grains) 

308.6471 
154.3235 
77.1617 
38.5808 

Legal  Tender 


Value 

$0.0340 

.0170 

.0085 

.0042 


Money  of  Siam. 

The  silver  coin  forming  the  monetary  unit  of  Siam  is  called 
"tical  or  bat"  and  its  value  is  fixed  at  60  cents,  as  the  Bangkok 
mint  exchange  3  Mexican  dollars  for  5  ticals. 

The  tical  is  divided  into  salung  and  fuang  (1  tical  is  equal 
to  8  fuang)  while  the  copper  and  pewter  coins  take  the  place 
of  the  cowries — the  former  Siamese  medium  of  exchange — 
800  of  which  were  taken  as  equal  to  1  fuang. 

Prior  to  November  27,  1902,  Siam  was  on  a  purely  silver 
basis,  hence  its  tical  followed  the  bullion  value  of  Mexican  dollars. 
On  the  date  named  the  mint  was  closed  to  free  coinage  and  the 
Government  fixed  the  value  of  the  tical  by  establishing  its  ratio 
to  the  pound  sterling.  The  rate  at  first  was  20  to  the  pound, 
but  the  number  was  finally  reduced  by  successive  reductions 
of  \  tical,  and  in  June,  1903,  the  rate  was  18f  ticak  to  the  pound, 
hence  at  that  time  the  tical  was  worth  25  9-10  cents. 

The  new  monetary  law  of  1903  authorizes  striking  the 
following  silver  pieces: 


SILVER  COINS. 


Denomination 


Tical 


1  Tical  or  Salung 
\  Tical  or  Fuang 


Gross  Weight 
(Grains) 


231.480 


57.8703 
28.9356 


Fineness 
(Thousandths) 


900 


900 
900 


Pure  Silver 
(Grains)  Legal  Tender 

f      Full  legal 

tender  if  98% 
208 .  3320  -I  of  full  weight 

and  un- 

mutilated. 

f  For  fractions 

of  tical  if 
unmutilated. 


26.0420 


Four  ticals  equal  1  tamling;  20  tamling  equal  1  chang;  50  chang 
equal  1  hap;  100  hap  equal  1  tara. 

Cowries  (also  called  bia  in  Siam)  are  the  well  known  shells 
used  in  many  parts  of  Asia  and  Africa  as  a  medium  of  exchange 
for  small  value.  In  Siam  about  219  or  220  are  reckoned  equal 
to  1  penny  sterling  (2  cents),  which  corresponds  closely  to  the 
general  rating  of  the  bat  or  tical,  at  2  shillings  6  pence  sterling. 


42  FOREIGN  EXCHANGE  TEXT  BOOK 

This  is,  however,  more  than  the  actual  average  value  of  the 
coin,  which  is  60  cents. 

Small  pewter  and  copper  coins  have  of  late  been  introduced 
as  a  substitute  for  the  cowrie  shell.  The  pewter  coins  are 
called  "lot"  and  "at."  They  are  small  flat  bits  of  pewter. 
Two  lots  equal  one  at. 

The  copper  coin  2  ats,  about  the  size  of  the  English  half- 
penny, only  a  little  thicker,  is  called  song  peis.  Two  song  peis 
equal  one  fuang. 

The  fuang  and  salung  are  flat  pieces  of  silver.  They  repre- 
sent simply  a  certain  weight  of  the  metal.  It  is  the  same  with 
the  bat. 


Money  of  Philippine  Islands. 
Unit:     Peso  or  Dollar=100  Centavos  or  Cents 

The  value  of  the  gold  peso  in  the  money  of  the  United 
States,  as  declared  by  the  Director  of  the  United  States  mint, 
is  50  cents.  The  commercial  value  of  the  peso  in  the  United 
States  fluctuates  according  to  the  demand  for  drafts,  checks 
and  bills  of  exchange  on  the  Philippines  and  the  supply  of  such 
exchange  in  the  market  for  sale.  In  exchange  transactions 
drafts  should  be  drawn  in  pesos  and  centavos,  or  in  United 
States  dollars,  the  latter  at  exchange  on  New  York.  If  drawn 
in  "Dollars,  Lccal  Currency"  they  are  subject  to  a  stamp  tax 
as  a  penalty. 

The  paper  currency  and  gold,  silver  and  minor  coins  in 
circulation  and  their  approximate  equivalents  in  United  States 
money  are  as  follows: 

PAPER  MONEY. 

Notes  issued  by  the  Banco  Espanol  Philippine,  whose 
issue  being  very  limited  (about  $2,000,000)  are  very  much 
sought  after.  We  have  no  data  as  to  the  denominations  of 
these  notes.  Silver  certificates  (new)  in  denominations  of  2,  5 
and  10  pesos. 

GOLD  COINS. 

No  gold  coins  have  as  yet  been  minted,  but  those  of  the 
United  States  and  Great  Britain  circulate. 

The  new  gold  unit  will  be  the  peso,  containing  12  9-10 
grains  of  gold,  9-10  fine — which  will  be  legal  tender  for  all 
debts,  public  and  private  in  the  Islands. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  43 

SILVER  COINS. 

Those  ;n  circulation  aside  from  the  coinage  are:  British 
trade  dollar,  Mexican  dollar  or  peso,  Spanish  Philippine 
dollars  or  pesos,  Spanish  half-dollar  (50  centavos),  Spanish 
pesetas,  Spanish  10,  20  and  50  centavo  pieces. 

The  new  silver  coins,  coined  in  United  States,  are: 

Value  in 

Gross  Weight  Fineness  Pure  Silver  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

Peso  416.000  900  374.4000  $0.50 

50  Centavos  208.000  900  187.2000  .25 

20  Centavos  83.100  900  74.7900  .10 

10  Centavos  41.550  900  18.6975  .05 

5  Centavos  20.775  900  9.3487  .02$ 

MINOR  COINS. 

Spanish  copper  centavo  pieces  and  the  new  1  centavo 
and  ^  centavo  pieces  of  bronze. 

The  principal  banks  are  the  Hong  Kong  and  Shanghai 
Banking  Corporation,  the  Chartered  Bank  of  India,  Australia 
and  China,  and  the  International  Banking  Corporation. 

The  currency  of  these  Islands  is  in  a  state  of  transition 
from  the  irregular  Oriental  coins  to  that  of  the  United  States 
dollars. 

AFRICAN  COUNTRIES. 

Money  of  Algeria. 
Unit:     Franc=100  Centimes 

The  monetary  system  of  Algeria  (a  French  colony)  is  the 
same  as  in  France.  In  exchange  transactions  drafts,  checks 
and  bills  of  exchange  are  drawn  in  francs  or  English  money, 
and  the  commercial  value  of  the  franc  is  governed  by  the  price 
of  exchange  on  Paris  and  London.  The  money  in  circulation 
consists  of  paper  currency  and  gold,  silver  and  bronze  coins. 
Bank  notes  are  issued  by  the  Bank  of  Algeria.  Coins  and 
value  are  same  as  in  France. 


Money  of  Egypt. 

Unit:     Egyptian  Pound  =100  Piastres 

1  Piastre  =10  Ochr-el-guerches 

Table  of  Weights  of  Money. 

1  dram  or  dirhem 
12  drams=l  uckieh 

Originally  a  dependency  of  Turkey  which  grossly  mis- 
governed it.  The  revolution  of  1881  to  1883,  of  Arabi  Pasha, 
was  suppressed  by  the  English  Government  under  Si'  General 


44  FOREIGN  EXCHANGE  TEXT  BOOK 

Wolseley  (now  Lord  Wolseley)  at  great  expense.  The  Arabs 
taking  advantage  of  the  complications,  under  guidance  of  the 
Mahdi,  attacked  the  provinces  of  lower  Egypt,  and  in  spite  of 
the  Soudan  Expedition  of  1884  to  1886  to  relieve  General 
Gordon  at  Khartoum,  the  British  were  compelled  to  abandon 
the  Province  of  Dorjota  to  the  Arabs.  General  Kitchener 
recaptured  the  provinces. 

The  country  is  governed  by  a  Khedive  but  in  reality  Eng- 
land directs  all  its  affairs,  which  are  now  in  a  fairly  prosperous 
condition.  Cairo  is  a  great  social  center  during  the  winter 
season  and  the  trips  up  the  Nile  River  attract  thousands  of 
travelers  to  Egypt  annually. 

The  monetary  law  of  1885  provided  for  the  introduction 
of  a  single  gold  standard  with  silver  as  divisional  coin.  The 
Egyptian  pound  is  divided  into  100  piastres  and  the  piastres 
into  10  ocher-el-guerches  (oshr-el-ghirsh)  or  tenths  of  a  piastre. 
Silver  is  legal  tender  to  the  amount  of  200  piastres,  or  about 
$10,  in  any  one  payment.  Nickel  and  bronze  coins  are  legal 
tender  to  the  amount  of  10  piastres  or  about  50  cents.  Pay- 
ments in  Egypt  are  usually  made  in  foreign  gold  pieces  which 
are  officially  rated  by  the  government  as  follows: 

Pound  Sterling  (English.) 97.  50  piastres 

Turkish  Pound 87 .  75  piastres 

20-Franc  piece 77.15  piastres 

German  gold  coins  are  not  rated,  but  are  valued  as  follows: 
20-mark  piece,  95.5  piastres;  10-mark  piece,  47.75  piastres. 

Silver  coins,  such  as  the  Maria-Theresa  thalers,  the  med- 
jidies,  5-franc  pieces,  etc.,  are  no  longer  received  in  the  public 
treasuries,  which  accept  no  coins  except  English  sovereigns, 
2C-franc  pieces  and  Turkish  pounds. 

The  value  of  the  gold  Egyptian  pound  in  the  money  of 
the  United  States  as  declared  by  the  Director  of  the  United 
States  mint  is  $4.943  cents.  In  exchange  transactions  between 
the  United  States  and  Egypt,  drafts,  checks  and  bills  of  exchange 
are  rarely  drawn  in  Egyptian  money,  but  instead  are  issued  in 
English  money  at  exchange  on  London;  therefore,  the  commer- 
cial value  of  the  Egyptian  pound  is  difficult  to  determine. 
The  money  in  circulation  consists  of  gold,  silver  and  bronze 
coins.  Paper  currency  is  issued  by  the  Bank  of  Egypt.  Eng- 
lish gold  and  French  Napoleons  are  the  best  currency  to  pro- 
vide for  a  trip.  Paper  does  not  command  such  good  exchange 
as  gold.  Turkish  money  is  also  in  general  circulation  amongst 
the  natives. 

The  gold,  silver  and  minor  coins,  and  the  weight,  fineness, 
value,  etc.,  are  as  follows: 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


45 


Denomination 

Egyptian  Pound 
Half-Pound 
(50  piastres) 


Denomination 

20  Piastres 

10  Piastres 

5  Piastres 

2  Piastres 

1  Piastre 


Denomination 
NICKEL. 


Gross  Weight 
(Grains) 

131.1750 


GOLD  COINS. 

Fineness 
(Thousandths) 

875 


65.5875  875 

SILVER  COINS. 


Pure  Gold 
(Grains) 

114.7781 
57.3890 


MINOR  COINS. 


Composition 


Gross  Weight 
(Grains) 


Value  in 

United  States 

Money 

$4.9430 
2.4715 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

432.  1059 

833J 

360.0883 

$0.9886 

216.0529 

833J 

180.0441 

.4943 

108.0264 

833J 

90.0220 

.2471 

43.2105 

833J 

36.0088 

.0988 

21.6052 

833J 

18.0044 

.0494 

Legal  Tender 


1  Ocher-el-guerche    j  27 . 0066 

A  1-piastre  (nickel)  piece  is  also  coined. 
BRONZE. 


}  Ocher-el-guerche 
focher-d-fuerche 


51.4406 
30.8647 


To  amount  of 
10  Piastres. 


Value 

1.0247 
.0098 
.0049 


1.0024 
.0012 


Money  of  Cape  Colony,  Natal,  Orange  Free  State,  Sierre  Leone 
and  South  African  Republic  (or  Transvaal)  of  Africa. 

All  these  countries  use  the  monetary  system  of  England 
either  by  reason  of  being  a  British  possession  or  on  account  of 
their  trade  relations  with  England,  and  accounts  are  kept  in 
pounds,  shillings  and  pence.  In  exchange  transactions  drafts, 
checks  and  bills  of  exchange  are  usually  drawn  in  English 
money  at  exchange  on  London. 

German  East  Africa. 

A  decree  of  February  28,  1904,  prescribes  a  new  monetary 
system  for  German  East  Africa.  The  date  upon  which  the 
law  becomes  effective  shall  be  proclaimed  by  the  governor. 
The  monetary  unit  shall  be  the  rupee  of  100  hellers.  The  coins 
to  be  struck  are  the  following: 

SILVER  COINS. 


Denomination 
2  Rupees 
1  Rupee 
\  Rupee 
|  Rupee 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

359.997 

916§ 

329.996 

) 

179.998 

916$ 

164.998 

[To  be 

89.999 

9161 

82.499 

{  estimated. 

44.999 

916$ 

41.249 

J 

46  FOREIGN  EXCHANGE  TEXT  BOOK 

These  coins  are  to  be  legal  tender  in  all  transactions  in 
which  coins  of  the  German  East  African  protectorate  and 
rupees  of  British  India  have  hitherto  been  legal  tender,  both 
at  the  public  treasuries  and  in  private  trade. 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender 

1  Heller  I'l^HSS  61-7  I      To  amount  of 

*Heller  1    tllinc  38'5  1          2  Rupees. 

Other  African  Countries. 

ABYSSINIA  and  ERITRIA  are  Italian  dependencies  and  are 
supplied  with  silver  coins  by  Italy,  known  as  Eritrean  dollars, 
half-dollar,  quarter-dollar  and  tenth-dollar,  the  commercial 
value  of  which  depends  upon  the  price  of  silver. 

CONGO  FREE  STATE  is  a  Belgian  colony  and  uses  the  silver 
and  minor  coins  of  Belgium. 

MADAGASCAR,  REUNION  and  TUNIS  are  French  colonies 
and  use  coin  furnished  by  France.  The  5-franc  piece  is  known  as 
the  dollar.  In  exchange  transactions,  drafts,  checks  and  bills 
of  exchange  are  usually  drawn  in  English  money  at  exchange 
on  London. 

ZANZIBAR  is  a  British  protectorate,  but  has  for  its  unit  the 
dollar  or  peso  of  100  cents.  Gold,  silver  and  bronze  coins  are 
in  circulation. 

PACIFIC  OCEAN. 

Money  of  Australia,  Fiji  Islands,  New  Zealand  and  Tasmania. 

These  are  islands  in  the  Pacific  Ocean  under  English  control 
and  use  the  money  of  England.  In  exchange  transactions 
between  the  United  States  and  these  countries  it  is  customary 
to  draw  drafts,  checks  and  bills  of  exchange  in  pounds  sterling 
at  exchange  on  London. 

Money  of  Hawaii  Island. 

The  money  in  use  in  these  islands  is  the  same  as  used  in 
the  United  States. 

Money  of  Dutch  East  Indies  (Islands). 

The  British  portion  of  Borneo  uses  dollars  and  cents  same 
as  in  the  United  States,  while  the  Dutch  portion  of  Borneo  and 
Java  and  Sumatra  use  the  money  of  Holland,  florins  and  cents. 
In  exchange  transactions  drafts,  checks,  etc.,  are  usually  drawn 
in  English  or  Holland  money. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  47 

NORTH  AMERICAN  COUNTRIES. 

Money  of  Canada. 
Unit:     Dollar=100  Cents 

The  value  of  the  silver  dollar  of  Canada  (no  gold  pieces  are 
coined)  in  the  money  of  the  United  States  is  governed  by  the 
price  of  silver,  although  in  cities  on  the  border  and  on  the  Great 
Lakes  the  silver  coins  are  taVen  at  their  face  value.  The  gold 
coins  of  the  United  States  and  Great  Britain  are  used  almost 
exclusively.  The  money  in  circulation  consists  of  paper  cur- 
rency, silver  and  copper  coins.  The  denominations  of  silver 
and  copper  coins  are  practically  the  same  as  in  the  United  States. 
Notwithstanding  Canada  is  a  British  colony  its  trade  relations 
with  the  United  States  were  too  important  to  admit  of  the 
adoption  of  the  complicated  British  monetary  system. 

Silver  is  legal  tender  to  the  amount  of  $10  and  bronze  coins 
to  the  amount  of  25  cents.  The  value  of  English  silver  coins  in 
circulation  has  been  officially  fixed  as  follows:  The  crown  or 
5  shillings,  $1.20;  the  one-half  crown,  or  1\  shillings,  $0.60; 
the  florin,  or  2  shillings,  $0.48;  the  shilling,  $6.24;  the  one-half 
shilling,  $0.12.  The  weight,  fineness,  etc.,  of  silver  and  minor 
coins  are  as  follows: 


Value  in 

Gross  Weight            Fineness 

Pure  Silver 

United  States 

Denomination 

(Grains)            (Thousandths) 

(Grains) 

Money 

50-cent  pieces 

179.3239              925 

165.8746 

$0.50 

25-cent  pieces 

89.6619              925 

82/9373 

.25 

10-cent  pieces 

35.8647              925 

33.1749 

.10 

5-cent  pieces 

17.9323              925 

16.5874 

.05 

MINOR  COINS. 

Gross  Weight 

Denominations 

Composition             (Grains) 

Legal  Tender 

Value 

f  95%  copper, 

To  amount  of 

British  Half-Penny 

•{     4%  tin  and      87.  5000  <j 

1  Shilling  or 

$0.0101 

1     1%  zinc 

25  cents. 

Money  of  United  States. 
Unit:     Dollar=100  Cents 

Table  of  Weights  of  Money. 

24  grains  =1  pennyweight 

20  pennyweights  =1  ounce  «_  ,  ^ 

12  ounces  =1  pound  Troy     »M-»b    f 

(480  grains  =1  ounce) 

There  are  ten  different  kinds  of  money  in  circulation  in 
the  United  States,  namely,  gold  coins,  standard  silver  dollars, 
subsidiary  silver,  gold  certificates,  silver  certificates,  treasury 
notes  issued  under  the  act  of  July  14,  1890,  United  States  notes 
(also  called  greenbacks  and  legal  tenders),  national-bank  notes, 


/    fll 


48  FOREIGN  EXCHANGE  TEXT  BOOK 

and  nickel  and  bronze  coins.  These  forms  of  money  are  all 
available  as  circulation.  While  they  do  not  all  possess  the 
full  legal-tender  quality,  each  kind  has  such  attributes  as  to 
give  it  currency.  The  status  of  each  kind  is  as  follows: 

GOLD  COIN  is  legal  tender  at  its  nominal  or  face  value  for 
all  debts,  public  and  private,  when  not  below  the  standard 
weight  and  limit  of  tolerance  prescribed  by  law;  and  when 
below  such  standard  and  limit  of  tolerance,  it  is  legal  tender  in 
proportion  to  its  weight. 

STANDARD  SILVER  DOLLARS  are  legal  tender  at  their  nomi- 
nal or  face  value  in  payment  of  all  debts,  public  and  private, 
without  regard  to  the  amount,  except  where  otherwise  expressly 
stipulated  in  the  contract. 

SUBSIDIARY  SILVER  (silver  coins  under  Si)  is  legal  tender 
for  amounts  not  exceeding  $10  in  any  one  payment. 

TREASURY  NOTES  OF  THE  ACT  OF  JULY  14,  1890,  are  legal 
tender  for  all  debts,  public  and  private,  except  where  otherwise 
expressly  stipulated  in  the  contract. 

UNITED  STATES  NOTES  are  legal  tender  for  all  debts,  public 
and  private,  except  duties  on  imports  and  interest  on  the  public 
debt. 

GOLD  CERTIFICATES,  SILVER  CERTIFICATES  AND  NATIONAL- 
BANK  NOTES  are  NOT  legal  tender,  but  both  classes  of  certificates 
are  receivable  for  all  public  dues,  while  national-bank  notes 
are  receivable  for  all  public  dues  except  duties  on  imports, 
and  may  be  paid  out  by  the  government  for  all  salaries  and 
other  debts  and  demands  owing  by  the  United  States  to  indi- 
viduals, corporations  and  associations  within  the  United  States, 
except  interest  on  the  public  debt  and  in  redemption  of  the 
national  currency.  All  national  banks  are  required  by  law  to 
receive  the  notes  of  other  national  banks  at  par. 

THE  MINOR  COINS  of  nickel  and  copper  are  legal  tender  to 
the  extent  of  25  cents. 

PAPER  MONEY. 

Gold  certificates  are  issued  in  denominations  of  20,  50,  100,  500, 
1,000,  5,000,  10,000  dollars.  Silver  certificates  are  issued  in  denomina- 
tions of  1,  2,  5,  10,  20,  50,  100,  500  and  1,000  dollars.  National  Bank 
notes  are  issued  in  denominations  of  5,  10,  20,  50,  100,  500  and  1,000 
dollars.  United  States  notes  are  issued  in  denominations  of  1,  2,  5,  10, 
50,  100,  500  and  1,000  dollars.  Currency  certificates  in  denominations  of 
10,000  dollars.  Treasury  notes  in  denominations  of  1,  2,  5,  10,  20,  100 
and  1,000  dollars. 

GOLD  COINS. 

Gross  Weight  Fineness  Pure  Gold 

Denomination  {Grains)  (Thousandths)  (Grains)  Value 

Double  Eagle  ($20)    516.0000               900             464.4000  $20.00 

Eagle                  ($10)    258.0000                900              232.2000  10.00 

Half-Eagle        ($5)      129.0000                900              116.1000  5.00 

Quarter-Eagle  ($2$)     64.5000               900                58.0500  2.50 

One  Dollar    (a)              25.8000               900                23.2200  1.00 

(a)   Monetary  unit,  no  longer  coined: 
All  pold  coins  are  unlimited  legal  tender  for  all  dues. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  49 

SILVER  COINS. 

Gross  Weight  Fineness  Pure  Silver 

Denomination  (Grains)  (Thousandths)  (Grains)  Value 

Dollar  412.5000  900  371.2500  $1.00 

Half- Dollar  192.9000  900  173.6100  .50 

Quarter-Dollar  96.4500  900  86.8050  .25 

Dime  38.5800  900  34.7220  .10 

MINOR  COINS. 

The  present  denominations  of  minor  coins  are:  5-cent  piece 
(nickel)  weighing  77.16  grains  and  composed  of  75%  copper 
and  25^  nickel;  the  1-cent  piece  (copper)  weighing  48  grains, 
composed  of  95%  copper  and  5%  tin  and  zinc.  They  are  legal 
tender  not  to  exceed  25  cents  for  all  dues. 

Weights  of  Coins  of  the  United  States. 

The  weight  of  $1,000  in  United  States  gold  coin  is  53.75 
troy  ounces,  equivalent  to  3.68  pounds  avoirdupois. 

The  weight  of  $1,000  in  standard  silver  dollars  is  859.375 
troy  ounces,  equivalent  to  58.92  pounds  avoirdupois. 

The  weight  of  $1,000  in  subsidiary  silver  (50,  25  and  10  cent 
pieces)  is  803.75  troy  ounces,  or  55.11  pounds  avoirdupois. 

/> 
Money  of  Alaska. 

Unit:     Dollar=100  Cents 

The  money  of  the  United  States  as  well  as  that  of  Canada 
is  in  circulation,  but  in  the  territory  of  the  United  States  the 
unit  is  a  dollar  of  100  cents.  Being  a  great  gold  producing 
country  with  poor  banking  facilities,  gold  dust  is  used  for  local 
commercial  purposes  in  lieu  of  coined  pieces. 

Money  of  Mexico. 
Unit:     Peso =100  Centavos 
Table  of  Weights  of  Money. 
48  Tormins  or  8  Drachmas=l  Onza  or  28.752  grams  or  443.7186 

grains. 

French  weights  are  used. 

Mexico's  present  money  of  account  is  the  gold  peso,  the 
value  of  which,  as  declared  by  the  director  of  the  United  States 
mint,  is  49  8-10  cents  ($0.498). 

In  exchange  transactions  between  Mexico  and  United 
States  drafts,  checks  and  bills  of  exchange  are  drawn  either  in 
Mexican  dollars  or  in  United  States  dollars,  the  latter  "at 
exchange  "  on  New  York  City.  Being  one  of  the  chief  silver  pro- 
ducing countries  of  the  world  the  greater  part  of  Mexico's  coin- 
age is  exported  to  China  and  the  Central  and  South  American 
countries.  The  gold  standard  was  adopted  by  Act  of  Congress 
of  December  9,  1904. 


50  FOREIGN  EXCHANGE  TEXT  BOOK 

The  currency  of  Mexico  consists  of  notes  of  banks,  silver, 
nickel  and  copper  coins. 

PAPER  MONEY. 

Notes  of  28  different  banks  circulate  at  par  in  Mexico  City, 
their  denominations  being  5,  10,  20,  100,  500  and  1,000  pesos 
or  dollars. 

The  only  notes  accepted  by  the  government  offices  in  pay- 
ment of  duties  are  those  of  the  Banco  National  de  Mexico  and 
the  Banco  de  Londres  y'Mexico.  These  two  banks  do  not 
accept  the  notes  of  other  Mexican  banks,  but  they  are  generally 
accepted  by  the  other  banks  at  par.  The  Banco  Central  Mexi- 
cano,  however,  is  obliged  by  contract  to  redeem  all  of  the  notes 
of  the  28  banks  referred  to  at  par,  except  two  Yucatan  bank  notes, 
which  are  at  a  discount  of  5%. 

GOLD  COINS  (old  issue.) 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination                        (Grains)  (Thousandths)  (Grains)  Money 

20  Pesos                         522.2463  875  456.9655  $19.6798 

10  Pesos                         261.1154  875  228.4760  9.8396 

5  Pesos                         130.5577  875  114.2380  4.9198 

2£  Pesos                           65.2788  875  57.1190  2.4599 

1  Peso                             26.1115  875  22.8476  .9839 

The  new  gold  coins  are  the  5  and  10-peso  pieces.  These 
coins  will  be  nine  hundred  thousandths  (0.900)  of  fine  gold,  and 
one  hundred  thousandths  (0.100)  alloy  of  copper.  The  gross 
weight  of  the  10-peso  pieces  are  8.3333  grams  or  128.6012  grains, 
the  5-peso  pieces  being  one-half  the  weight  of  the  10-peso. 

In  addition  there  are  gold  coins  of  eighth,  quarter  and  half 
doubloons  and  the  doubloon.  The  value  of  the  doubloon  is 
about  $15.53.  The  peso  or  dollar  gold  coin  does  not  circulate 
but  is  used  for  export  purposes  by  banks  or  for  making  pay- 
ments upon  gold  basis.  In  buying  the  20-peso  pieces  they 
should  be  purchased  by  weight,  as  they  are  frequently  worth 
more  than  the  United  States  $20  pieces. 

SILVER  COINS. 

The  principal  silver  coin  is  the  peso  or  dollar,  which  of 
modern  coinage  presents  the  most  imperfect  and  irregular 
minting  in  existence.  While  the  designs  have  a  similarity,  the 
successive  issues  vary  slightly  in  size,  thickness,  milling  and 
even  in  roundness.  Furthermore,  there  are  many  counterfeits 
in  brass  and  owing  to  the  diversity  of  good  Mexican  pesos  they 
can  only  be  detected  by  the  acid  test.  The  old  design  circulates 
and  is  at  a  premium  in  the  Orient.  The  subsidiary  silver  pieces 
are  even  more  imperfect  than  the  peso  or  dollar  pieces.  There 
is  an  old  design  (large)  50-centavo  piece,  also  a  new  one  similar 
in  size  to  the  United  States  50-cent  piece.  Of  the  25-centavo 
pieces  there  is  a  large  thin  one  of  old  issue,  also  a  new  one  cor- 
responding in  size  to  the  United  States  25-cent  piece. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  51 

SILVER  COINS  (old  issue). 

Value  in 

Gross  Weight  Fineness  Pure  Silver              United  States 

Denomination                    (Grains)  (Thousandths)           (Grains)                      Money 

Peso                          417.8001  902.7  377.1803  1  Value  of  unit  is 

50  Centavos            208.9000  902.7  188.5901           estimated 

20  Centavos               83.5600  902.7  75. 4360  \    quarterly   by 

10  Centavos              41.7800  902.7  37.7180       Director  of 

5  Centavos              20.8900  902.7  18. 8590 J       U.  S.  Mint. 

The  peso  and  50  centavo  are  of  old  and  new  style.  The  20, 
10  and  5-centavo  pieces  are  of  new  style. 

The  silver  coins  to  be  minted  under  the  Act  of  December 
9,  1904,  will  be  the  1-peso,  50-centavo,  20-centavo  and  10- 
centavo.  The  alloy  of  these  new  silver  peso  coins  will  be  nine 
thousand  and  twenty-seven  ten-thousandths  (0.9027)  of  pure 
silver  and  nine  hundred  and  seventy-three  ten-thousandths 
(0.0973)  of  copper.  The  other  new  coins  will  be  eight  hundred 
thousandths  (0.800)  fine. 

MINOR  COINS  (old  issue). 

One  centavo  of  bronze,  containing  95%  copper,  4%  tin 
and  1%  zinc,  the  nominal  value  being  about  1  cent  in  United 
States  money. 

Under  the  Act  of  December  9,  1904,  there  will  be  coined 
a  5-centavo  (5  cents)  piece  of  nickel,  and  2  and  1-centavo 
pieces  of  bronze. 

The  equivalent  value  of  the  new  Mexican  gold  peso  (unit) 
in  terms  of  the  gold  coins  of  gold  standard  countries  is  as  follows: 
One  Gold  Peso  Equals — 

Germany 2.09  Marks  England 24.58  Pence 

Argentina 0.516  Pesos  Italy 2 .  58  Lire 

Austria-Hung.  .  2 . 45  Crowns  Turkey 1 1 . 36  Piastres 

Belgium 2 . 58  Francs  India 1.53  Rupees 

Bulgaria 2 .  58  Lews  Philippine  Is.  .  .  0 . 996  Pesos 

Brazil 0.912  Milreis  Japan 1 . 00  Yen 

Canada 0 .  498  Dollars  Liberia 0 . 498  Dollars 

Chile 1 .  36  Pesos  Monaco 2 .  58  Francs 

Costa  Rico  ....  1 . 07  Colons  Norway 1 .  86  Kronors 

Colombia 0 .  498  Dollars  Panama 0 .  498  Balboas 

Denmark 1 . 86  Kronor  Netherlands  .  .  .1.23  Florins 

Spain 2.58  Pesetas  Portugal 0.461  Milreis 

Egypt 24 .  24  Pence  Peru   1 . 02  Sols 

United  States  .  .0 .  498  Dollars  Russia 0 . 967  Rubles. 

Ecuador 1 . 02  Sucres  Roumania 2.58  Lei 

France 2 .  58  Francs  Switzerland  ...  2 . 58  Francs 

Finland 2 .  58  Finmarks  Servia 2 . 58  Dinars 

Greece 2.58  Drachma  Sweden, 1-86  Kronor 

Haiti 0.516  Gourdes  Newfoundland  .0.  491  Dollars 

Br.  Honduras  .  .0.  498  Dollars  Uraguay 0.  481  Pesos 

Venezuela 2 .  58  Bolivars. 

The  equivalent  value  of  the  silver  pesos  in  money  of  coun- 
tries having  silver  standard  are  declared  by  the  Department  of 
Finance  and  Public  Credit  in  months  of  May  and  November  of 
each  year,  and  is  based  upon  the  average  price  of  silver  for  the 
preceding  six  months. 


52 


FOREIGN  EXCHANGE  TEXT  BOOK 


i 

o 


=  1.94  Peso 
=2.01  Pesos 
=9 . 76  Pesos 
=0 . 39  Peso 
=0 . 09  Peso 
=0 . 65  Peso 


The  equivalent  value  of  the  gold  units  of  countries  having 
gold  standard  in  the  money  of  Mexico  (pesos  and  cents)  from 
and  after  July  1,  1905,  is  as  follows: 

1  German  Mark 
1  Argentina  Peso   • 
1  Aus.-Hun.  Crown. 
1  Belgian  Franc 
1  Bulgarian  Lew 
1  Brazilian  Milreis 
1  Canadian  Dollar 
1  Chilian  Peso 
1  Costa  Rican  Colon 
1  Colombian  Dollar 
1  Scand.  Kroner 
1  Spanish  Peseta 
1  Egyptian  Pound 
1  U.  S.  Dollar 
1  Ecuador  Sucre 
1  French  Franc 
1  Finnish  Mark 
1  Grecian  Drachma 


=0 . 48  Peso 
==1.94  Peso 
=0.41  Peso 
=0 . 39  Peso 
=0 . 39  Peso 
10  Peso 
01  Pesos 
=0.74  Peso 
=0.93  Peso 
=2.01  Pesos 
=0 . 54  Peso 
=0 . 39  Peso 
=9 . 90  Pesos 
=2.01  Pesos 
=0.98  Peso 
=0 . 39  Peso 
=0 . 39  Peso 
=0 . 39  Peso 


1  Haitian  Gourd 
1  British  Hond.  Dol. 
1  English  Pound 
1  Italian  Lira 
1  Turkish  Piastre 
1  Indian  Rupee 
1  Philippine  Peso 
1  Japanese  Yen 
1  Panama  Balboa 
1  Netherlands  Florin 
1  Portuguese  Milreis 
1  Peruvian  Sol 
1  Russian  Ruble 
1  Roumanian  Lei 
1  Swiss  Franc 
1  Servian  Dinar 
1  Uruguay  Peso 
1  Venezuelan  Bolivar 


=  1.00  Peso 
=  1.00  Peso 
=2.01  Pesos 
=0.81  Peso 
=2. 17  Pesos 
=0.98  Peso 


1.03  Peso 
0 . 39  Peso 
0.39  Peso 
0 . 39  Peso 
2 . 08  Pesos 
=0.39  Peso 


Money  of  Newfoundland. 
Unit:     Dollar=100  Cents 

Although  a  British  colony,  the  money  of  account  of  New- 
foundland is  the  dollar  of  100  cents  as  in  Canada  and  the  United 
States. 

The  actual  value  of  the  gold  dollar  in  the  money  of  United' 
States  is  $1.014.     The  money  in  circulation  consists  of  paper 
currency  supplied   by  banks  in  Canada  and  gold,   silver  and 
copper  coins.     The  gold  coins  of  the  United  States  and  England 
are  also  in  circulation  and  are  full  legal  tender. 


CENTRAL  AMERICAN   COUNTRIES. 

Money  of  British  Honduras. 
Unit:     Peso  or  Dollar=100  Centavos  or  Cents 

Although  a  British  colony,  the  money  of  account  is  the  peso 
or  dollar  of  100  centavos  or  cents,  as  in  other  Central  American 
States  and  Mexico.  No  gold  coins  or  paper  money  are  issued. 
The  money  in  circulation  consists  of  silver  and  bronze  coins 
and  the  gold  coins  of  the  United  States  and  Central  American 
States.  In  exchange  transactions  between  British  Honduras 
and  the  United  States,  drafts,  checks  and  bills  of  exchange  are 
drawn  in  United  States  dollars  at  exchange  on  New  York  City 
or  in  Mexican  dollars.  The  actual  value  of  the  silver  peso 
fluctuates  according  to  the  price  of  silver. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  53 

Money  of  Panama. 

By  decree  of  June  28,  1904,  Panama  adopted  the  gold 
standard,  prescribing  as  the  unit  of  value  a  gold  coin  to  be  called 
a  "balboa."  It  also  made  the  United  States  gold  dollar  and 
its  multiples  legal  tender  in  the  Republic  on  an  equivalence  with 
the  balboa  and  its  multiples. 

The  law  prescribes  the  following  pieces  when  the  executive 
.shall  make  provision  for  the  same: 

GOLD  COINS. 


Value  in 

Gross  Weight            Fineness               Pure  Gold 

United  States 

Denomination 

(Grains)           (Thousandths)           (Grains) 

Money 

1    Balboa 

25.8                     900                  23.22 

$1.00 

2\  Balboa 

64.5                     900                  58.05 

2.50 

5    Balboa 

129.0                    900                116.10 

5.00 

10    Balboa 

258.0                    900                232.20 

10.00 

20    Balboa 

516.0                     900                464.40 

20.00 

The  pieces 

of  10  or  20  balboa  shall  be  coined 

as  whichever 

shall  be  deemed 

most  necessary  for  commerce. 

SILVER  COINS. 

-  Value  in 

Gross  Weight             Fineness               Pure  Silver 

United  States 

Denomination 

(Grains)           (Thousandths)           (Grains) 

Money 

Peso 

358.80                  900                347.22 

$0.50 

JPeso 

192.90                  900                173.61 

.25 

1-5    Peso 

77.16                  900                  69.44 

.10 

1-10  Peso 

38.58                  900                  34.72 

.05 

1-20  Peso 

19.29                  900                   17.36 

.025 

The  peso  is  equal  to  one-half  balboa. 

National  silver  coins  are  legal  tender  at  their  nominal 
value  in  all  transactions.  Provisions  are  made  for  the  exchange 
of  Colombian  silver  coins  for  the  new  Panamanian  silver  coins. 

MINOR  COINS. 

As  no  provision  was  made  for  the  coining  of  n.  vv  minor 
coins  it  is  presumed  the  old  minor  coins  will  continue  in  use. 
We  have  no  data  of  the  latter,  however. 


Money  of  Costa  Rica. 
Unit:     Colon=100  Centimes 

Costa  Rica  adopted  the  single  gold  standard  in  October, 
1896.  The  unit  is  the  colon,  divided  into  100  centimos.  The 
actual  value  of  the  gold  colon  in  the  money  of  the  United  States 
as  declared  by  the  Director  of  the  United  States  mint  is  SO. 4654. 
The  actual  currency  of  the  country  is  gold,  silver  and  paper, 
payable  in  gold  or  silver.  Only  fractional  silver  is  coined  and 
silver  is  legal  tender  to  the  amount  of  10  colon.  Silver  and 
bronze  coins  are  most  extensively  used  and  paper  currency  is 


54 


FOREIGN  EXCHANGE  TEXT  BOOK 


issued  by  banks.  In  exchange  transactions  between  Costa  Rica 
and  the  United  States,  drafts,  checks  and  bills  of  exchange  are 
drawn  in  United  States  dollars  at  exchange  on  New  York  City 
or  in  Mexican  dollars.  The  actual  value  of  the  silver  coins 
fluctuates  according  to  the  price  of  silver.  The  gold,  silver 
and  minor  coins  in  circulation  and  their  approximate  equiva- 
lents in  the  United  States,  are  as  follows: 


GOLD  COINS. 


Denomination 

20  Colons 

10  Colons 

5  Colons 

2  Colons 


Gross  Weight            Fineness               Pure  Gold 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

240.1274 

900 

216.1147 

$9.3072 

120.0637 

900 

108.0573 

4.6536 

50.0318 

900 

54.0286 

2.3268 

24.0127 

900 

21.6114 

.9307 

Gold  coins  are  full  legal  tender. 

SILVER  COINS. 
The  denomination  and  value  of  silver  coins  are  as  follows: 

50  Centimes  (       $  Colon)  value  $0 .  2367 

25  Centimes  (       |  Colon)  value    0.1163 

10 Centimes  (1-10 Colon)  value    0.0465 

5  Centimos  ( 1-20  Colon)  value    0 . 0233 


MINOR  COINS. 


Denomination 

2  Centimos 
1  Centimo 


Composition 
(  75%  copper  and 
\  25%  nickel 


Gross  Weight 

(Grains)  Legal  Tender 

69.4456  /To  amount  of 
34.  7228  \       1  Colon 


Value 
$0.0092 
.0046 


Money  of  Guatemala,  Honduras,  Nicaragua  and  Salvador. 
Unit:     Peso=100  Centavos 

These  republics  all  have  the  same  monetary  system.  Being 
poor  countries  with  comparatively  small  population,  very  little 
money  is  used.  The  money  in  circulation  consists  of  paper 
currency  and  gold,  silver  and  copper  coins.  The  actual  value 
of  the  silver  peso  fluctuates  according  to  the  price  of  silver. 

Gold  is  usually  at  a  high  premium  in  Honduras. 

There  is  no  mint  in  Nicaragua;  all  coins  are  made  abroad, 
as  is  also  all  paper  currency. 

GOLD  COINS. 


Value  in 

Gross  Weight 

Fineness 

Pure  Gold 

United  States 

Denomination 

(Grains) 

(Thousandths) 

(Grains) 

Money 

Onza  or  Doubloon 

417.6659 

875 

365.4576 

$15.7359 

Half  Onza 

208.8329 

875 

182.7288 

7.8694 

20  Pesos 

497.8169 

900 

448.0352 

19.2952 

10  Pesos 

248.9084 

900 

224.0176 

9.6476 

5  Pesos 

124.4542 

900 

112.0088 

4.8238 

2  Pesos 

49.7816 

900 

44.8035 

1.9295 

iPeso 

24.8908 

900 

22.4017 

.9647 

THE  MONETARY  SYSTEMS  OF  THE  WORLD 


55 


SILVER  COINS. 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

358.8089 

900 

347.2280 

Estimated 

quarterly 

192.9044 

900 

173.G140 

by  Director 

of  United 

96.4522 

900 

86.8070 

States  mint 

Denomination 

Peso 
Half  Peso 

(50  Centavos) 
Quarter  Peso 

(25  Centavos) 

Dime  (10  Centavos)      38.5808  835 

Half  Dime 

(5  Centavos)  19.2904  835 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains) 

2  Centavos  J  75%  copper  and      69 .  4456 

1  Centavo  \  25%  nickel  34 .  7228 

Atlantic  Ocean. 


32.2150 
16.1075 


Legal  Tender 


Value 
$0.0200 
.0100 


BERMUDA  ISLAND:  Although  the  unit  of  money  is  the 
same  as  in  Great  Britain,  accounts  are  still  kept  in  dollars  and 
cents.  United  States  gold  coins  are  accepted  everywhere  and 
the  British  gold  and  silver  coins  are  in  circulation.  A  silver 
British  4-penny  piece  called  GROAT  is  supplied  by  Great  Britain, 
its  nominal  value  being  about  8  cents  in  United  States  money. 
Paper  money  is  issued  by  banks. 

CAPE  VERDE  ISLANDS:  These  islands  use  principally  the 
money  of  Portugal,  although  those  near  Africa  use  the  rupee 
and  coins  in  use  in  Zanzibar.  In  exchange  transactions  between 
these  islands  and  the  United  States,  drafts,  checks  and  bills  of 
exchange  would  most  likely  be  drawn  in  English,  French  or 
German  money.  Comparatively  very  little  money  is  used  and 
very  little  trade  with  other  countries. 

SAINT  HELENA  ISLAND:  This  island,  which  is  located  in 
mid-ocean,  southwest  of  Africa,  is  controlled  by  Great  Britain 
and  British  money  is  alone  legal  tender,  but  being  situated  in  a 
direct  line  for  vessels  passing  around  Cape  of  Good  Hope,  all 
kinds  of  money  pass.  No  paper  money  is  issued  and  gold  is 
little  used. 


WEST  INDIES  ISLANDS. 

ANGUILLA,  BAHAMA,  BARBADOES  AND  JAMAICA  ISLANDS. 

Unit:     Pounds=20  Shillings  of  12  Pence. 

These  islands,  being  under  British  control,  use  the  English 
system  as  their  unit  of  money,  although,  with  the  exception  of 
Jamaica,  accounts  are  kept  in  dollars  and  cents.  Gold  coins 
of  the  United  States  and  Great  Britain  circulate  and  are  accepted 
evervwhere. 


56  FOREIGN  EXCHANGE  TEXT  BOOK 

ANGUILLA  is  furnished  by  Great  Britain  with  a  four-penny 
silver  piece  called  groat,  the  equivalent  in  United  States 
money  of  about  8  cents.  Paper  money  issued  by  banks  at 
Nassua,  Bahama  and  Jamaica  are  used. 

BAHAMA  is  also  supplied  with  the  silver  piece  called  groat 
as  well  as  other  silver  and  minor  coins. 

The  monetary  conditions  at  Barbadoes  are  the  same  as  at 
Bahama  Islands. 

At  JAMAICA  the  gold  coins  most  generally  in  use  are  those 
of  the  United  States,  but  British  gold  coins  are  of  course  accepted 
and  to  some  extent  used.  The  active  circulation  consists  of 
silver  and  minor  coins  supplied  by  Great  Britain.  Paper  money 
is  issued  by  the  Colonial  Bank. 

In  exchange  transactions  drafts,  checks  and  bills  are 
drawn  in  English  money  at  exchange  on  London  or  in  United 
States  dollars  at  exchange  on  New  York  City. 

Money  of  Haiti. 
Unit:     Gourde=100  Cents 

The  money  of  account  of  Haiti  is  the  gourde  of  100  cents. 
The  actual  currency  is  an  irredeemable  paper.  The  metallic 
gourdes  have  disappeared  almost  entirely  from  circulation  and 
are  hoarded.  Only  the  divisional  coins  are  found  in  circulation, 
but  even  these  frequently  command  a  premium  of  from  1  to  2 
per  cent.  A  great  many  United  States  gold  pieces  are  to  be 
met  with,  owing  to  the  fact  that  export  duties  have  to  be  paid 
in  gold.  Gold  is  usually  at  a  high  premium,  ranging  from  110 
to  150  per  cent. 

The  actual  value  of  the  gold  gourde  as  declared  by  the 
director  of  the  United  States  mint  is  96  and  5-10  cents 
($0.965).  In  exchange  transactions  between  Haiti  and  the 
United  States  drafts,  checks  and  bills  of  exchange  are  usually 
drawn  in  United  States  dollars  at  exchange  on  New  York  City. 
The  money  in  circulation  consists  of  paper  currency  and  gold, 
silver  and  bronze  coins  as  follows: 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

10  Gourdes  248.9084  900  224.0176  $9.6476 

5  Gourdes  124.4542  900  112.0088  4.8238 

2  Gourdes  49.7816  900  44.8035  1.9295 

1  Gourde  24.8908  900  22.4017  .9647 

SILVER  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Silver  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

Gourde  385.8089  900  347.2280  $0.9647 

Half  Gourde  192.9044  835  161.0752  .4824 

Fifth  Gourde  77.1617  835  64.4300  .1929 

Tenth  Gourde  38.5808  835  32.2150  .0964 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  57 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 


2  Centimes  /  95.%  ^°PR^'  „        154  .  3235  1  To  amount  of        $0.  0192 

1  Centime  7  $  pewter  and       77   1617       2  Gourdes.  .0096 

\    *•  /o  zinc  j 


Money  of  Cuba. 
Unit:     Peso=100  Centavos 

The  legal  monetary  system  of  Cuba  is  the  same  as  that  of 
Spain,  but,  as  a  matter  of  fact,  accounts  are  kept  in  piastres, 
pesos,  or  dollars. 

The  metallic  circulation  is  composed  chiefly  of  United 
States  gold,  Spanish  luis  or  20-peseta  pieces,  and  alphonsinos 
or  25-peseta  pieces.  The  former  in  weight  is  identical  with  the 
French  20-franc  gold  piece,  and  therefore  possesses  a  bullion 
value  of  S3. 86;  the  latter,  equivalent  to  25  pesetas,  is  worth 
$4.82.  By  a  Spanish  decree  the  luis  and  alphonsinos,  respec- 
tively, or  4  and  5  duro  pieces,  were  declared  to  be  worth  in 
Cuba  (Cuban  money  of  account)  $4.24  and  $5.30,  the  arbitrary 
premium  of  6  per  cent  being  extended  to  keep  gold  in  the 
island.  These  fictitious  values  were  confirmed  by  an  order  of 
President  McKinley  in  December,  1898. 

In  Cuba  when  a  dollar  is  mentioned  it  is  the  Cuban  dollar 
of  account,  which,  in  the  absence  of  a  special  trade  agreement, 
may  be  discharged  in  the  above-named  coin  at  the  rates  given. 

For  Government  purposes  the  United  States  currency  is 
the  standard,  official  salaries  and  Cuban  duties  being  paid  in 
that  medium. 

The  relative  values  of  Spanish  gold  and  American  gold  are, 
of  course,  slightly  affected  from  day  to  day  by  special  local 
demand  for  one  or  the  other.  The  present  tendency  is  to  extend 
the  use  of  the  United  States  money.  In  the  eastern  end  of  the 
island,  particularly  in  Santiago,  all  transactions  are  in  United 
States  currency,  while  in  the  western  portion,  in  the  prominent 
markets  of  Habana,  Mantanzas,  Cardenas,  etc.,  though  many 
transactions  are  based  on  the  same  standard,  much  of  the 
business  is  still  done  on  the  basis  of  Spanish  gold. 

From  the  above  statement  it  appears  that  a  Cuban  book 
account  of  say  $530  could  be  satisfied  with  100  alphonsinos, 
or  $482  in  United  States  gold.  Consequently  Spanish  coin  in 
comparison  with  Cuban  money  of  account  is  at  a  premium  of 
6  per  cent,  and  United  States  gold  compared  with  the  same 
money  of  account  appears  to  be  at  a  premium  of  11  per  cent. 
American  gold,  as  compared  with  Spanish,  therefore  seems  to 
be  at  a  premium  of  approximately  5  per  cent.  This,  however, 


58 


FOREIGN  EXCHANGE  TEXT  BOOK 


is  purely  imaginary,  as  500  nominal  Spanish  dollars  or  100 
alphonsinos  have  the  same  bullion  value  as  $482  in  United 
States  gold. 

Cuba  has  no  currency  nor  Government  bank  notes  of  its 
own.  The  commercial  money  of  the  country,  excepting  in 
Santiago  province,  is  Spanish  gold  supplemented  by  French 
gold.  Spanish  silver  is  the  fractional  currency  used  in  connec- 
tion with  Spanish  and  French  gold.  In  measuring  other  kinds 
of  money  by  the  United  States  dollars  there  is  no  difference  in 
value  between  the  United  States  gold  dollar  and  any  form  of 
United  States  paper  currency,  all  being  at  a  parity  with  each 
other.  United  States  silver  when  offered  in  quantities  is  taken 
at  a  discount,  but  this  is  on  account  of  its  inconvenience  in 
handling  and  the  preference  for  United  States  bills.  The 
United  States  silver  certificate,  as  above  indicated,  is  at  par 
with  gold.  The  difference  between  a  United  States  gold  dollar 
and  a  Spanish  gold  dollar  is  determined  not  only  by  the  weight 
and  fineness  of  the  gold  in  each  but  by  the  supply  and  demand 
of  exchange  operations. 

The  value  of  the  Spanish  silver  is  fixed  by  the  quotations  at 
Madrid  of  exchange  on  Paris  or  London,  and  in  a  lesser  degree  by 
the  supply  and  demand,  and  not  by  any  intrinsic  difference  in 
the  metal. 

The  par  of  exchange  in  Cuba  with  London  or  England  is 
$4.44  Spanish  gold  to  the  pound  sterling. 

The  actual  value  of  the  gold  peso  or  dollar  of  Cuba  as 
declared  by  the  director  of  the  United  States  mint  is  92  and 
6-10  cents  ($0.926).  In  exchange  transactions  between  the 
United  States  and  Cuba  drafts,  checks  and  bills  of  exchange  are 
drawn  in  United  States  dollars  at  exchange  on  New  York  or  in 
pesos  and  centimes,  the  money  of  that  country.  The  money 
in  circulation  consists  of  paper  currency,  gold,  silver  and  bronze 
coins.  United  States  money  circulates  freely. 


GOLD  COIN^. 

Gross  Weight  Fineness               Pure  Gold 

Denomination                        (Grains)  (Thousandths)           (Grains) 

Spanish  Quadruple 

(Onza)  417.6659  875  365.4576 

Doubloon  Isabella  129.4327  900  116.4894 
Alphonse 

(25  pesetas')              124.4543  900                112.0089 


Value  in 

United  States 

Money 

S15.7389 
5.0167 

4.8238 


MINOR  COINS. 


Denomination 

10  Centimes 
5  Centimos 
2  Centimos 
1  Centimo 


Composition 

|  95%  copper, 
>  4%  tin  and 
j  1%  zinc 


Gross  Weight 

(Grains)             Legal  Tender  Value 

154.3235]  $0.0192 

77. 1617  [  To  the  amount  of  .  0096 

30. 8647  f       5  Pesetas.  .0038 

15.4323  .0019 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  59 

Money  of  Porto  Rico. 
Unit:     Dollar=100  Cents 

The  value  of  the  gold  dollar  is  the  same  as  in  the  United 
States,  namely,  100  cents. 

While  in  some  cases  accounts  are  still  kept  in  Spanish 
money,  as  a  rule  they  are  now  kept  in  United  States  money 
and  drafts,  checks  and  bills  of  exchange  are  so  drawn. 

Money  of  Santo  Domingo. 
Unit:     Dollar=100  Cents 

While  the  unit  of  money  of  this  country  is  the  same  as  in 
the  United  States,  so  little  money  is  used  that  no  value  of  the 
coins,  mostly  silver,  can  be  given.  Paper  currency  is  issued 
by  banks. 

Money  of  Martinique. 
Unit:     Franc=100  Centimes 

The  actual  value  of  the  gold  franc  in  the  money  of  the 
United  States  is  19  and  3-10  cents  ($0.193).  This  country 
uses  the  money  of  France  almost  exclusively,  although  United 
States  gold  coins  are  accepted.  In  exchange  transactions 
between  the  United  States  and  Martinique,  drafts,  checks  and 
bills  of  exchange  are  usually  drawn  in  United  States  dollars  or 
francs. 

SOUTH  AMERICA. 
Money  of  Argentine  Republic. 
Unit:     Peso=100  Centavos 

The  actual  currency  of  Argentina  is  depreciated  paper, 
fluctuating  greatly  in  value.  Gold  is  usually  at  a  high  premium, 
for  instance,  180  premium — that  is,  $280  paper  to  $100  gold. 
Dur'ng  the  year  1903  gold  was  at  a  premium  of  127.27  per  cent. 
Argentine  gold  coins  are  full  legal  tender.  Silver  coins  are 
legal  tender  only  to  the  amount  of  10  pesos  and  bronze  coins 
to  the  amount  of  1  peso. 

The  value  of  the  gold  peso  in  the  money  of  the  United  States 
is  96  and  48-100  cents  ($0.9648).  In  exchange  transactions 
between  this  country  and  the  United  States,  drafts  and  bills 
of  exchange  are  generally  drawn  in  United  States  dollars  at 
exchange  on  New  York  Caty,  unless  otherwise  stipulated.  The 
money  in  circulation  consists  of  paper  currency  and  gold, 
silver  and  copper  coins,  as  follows: 


60 


FOREIGN   EXCHANGE  TEXT  BOOK 


PAPER  MONEY. 

The  paper  currency  is  composed  exclusively  of  government 
notes  convertible  into  gold  at  the  conversion  office  at  the  rate 
of  44  centavos  (cents)  to  one  peso  or  dollar  paper,  whenever 
that  office  has  gold  on  hand.  The  denominations  are:  1,  2,  5, 
10,  20,  50,  100,  200,  500  and  1,000.  There  are  also  50-centavo 
notes  and  notes  of  5,  10  and  20  centavos,  the  latter  not  being- 
legal  tender. 

GOLD  COINS. 


Gross  Weight  Fineness 

Denomination  (Grains)  (Thousandths) 

Argentina  (5  Pesos)    124 . 4542  900 

Half  Argentina 

(2JPeso)  62.2271  900 

SILVER  COINS. 


Denomination 
Peso 

50  Centavos 

20  Centavos 

10  Centavos 

5  Centavos 


Denomination 
20  Centavos  (Nickel) 
10  Centavos  (Nickel) 
5  Centavos  (Nickel) 

2  Centavos(Bronze) 
1  Centavo  (Bronze) 


Pure  Gold 
(Grains) 

112.0088 
56.0044 


Gross  Weight 

Fineness 

Pure  Silver 

(Grains) 

(Thousandths) 

(Grains) 

385.8089 

900 

347.2280 

192.9044 

900 

173.6140 

77.1617 

900 

69.4456 

38.5808 

900 

34.7228 

19.2904 

900 

17.3614 

Value  in 

United  States 

Money 

$4.8238 
2.4119 


Value  in 

United  State* 
Money 

$0.9648 
.4824 
.1929 
.0964 
.0482 


MINOR  COINS. 


Composition 

75%  copper  and 
25%  nickel 

95%  copper, 
4%  tin  and 
1%  zinc 


Gross  Weight 
(Grains) 
61.7294  ] 
46.2970  | 
30.8647 


Legal  Tender 


154.3235 
77.1617 


I  To  amount  of 
1  Peso. 


Value 

).  1929 

.0964 

.0482 

.0192 
.0096 


Money  of  British  Guiana. 

Being  a  British  colony  the  money  in  use  is  supplied  by 
Great  Britain,  although  accounts  are  generally  kept  in  dollars 
and  cents  and  drafts  and  bills  of  exchange  are  usually  so  drawn. 

Paper  money  is  issued  by  banks.  Gold  does  not  circulate. 
It  is  at  a  premium  of  1£  to  2  per  cent  over  the  actual  currency, 
which  is  paper  and  silver  coins. 


Money  of  Bolivia. 
Unit:     Boliviano^  100  Centavos 

This  country  has  the  single  silver  standard.  The  money 
of  account  is  the  silver  boliviano  or  silver  peso.  The  coinage 
of  gold  has  long  since  been  suspended  and  the  old  onzas  and  escu- 
dos  are  no  longer  found  in  the  country.  The  Bank  of  Bolivia 
issues  paper  money  redeemable  on  demand  and  generally  OB 
a  par  with  silver. 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

385.8089 

900 

347.2280  1 

Estimated 

192.9044 

900 

173.6140  I 

quarterly 

69.4456 

900 

62.5010  [ 

by  Director 

34.7228 

900 

31.2505  | 

of  the 

17.3614 

900 

15.6252  J 

U.  S.  Mint, 

THE  MONETARY  SYSTEMS  OF  THE  WORLD  61 

The  value  of  the  silver  boliviano  in  the  money  of  the  United 
States  fluctuates  according  to  the  market  price  of  silver.  In 
exchange  transactions  between  Bolivia  and  the  United  States 
drafts  and  bills  of  exchange  are  usually  drawn  in  United  States 
dollars,  at  exchange  on  New  York  City,  unless  preferred  in 
other  money.  The  money  in  circulation  consists  of  paper 
currency  and  silver,  nickel  and  bronze  coins.  The  home  value 
of  the  silver  boliviano  is  about  the  same  as  the  home  value  of 
the  silver  dollar  in  the  United  States. 

The  weight,  fineness,  etc.,  of  the  silver  coins  are  as  follows: 

SILVER  COINS. 

Grnss  Wf>iirl 
Denomination 

Boliviano 
50  Centavos 
20  Centavos 
10  Centavos 
5  Centavos 

The  silver  boliviano  is  worth  about  43  to  44  cents  at  the 
present  time.  • 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)        Legal  Tender       Value 

10  Centavos  (Nickel)      j  75%  copper  and       77. 1617  (No  data)    $0.0964 
5  Centavos  (Nickel)       1  25%  nickel  38. 5808  . 0482 

1  Centavo  (Bronze)       J  95%  copper,         1   154..  3235  .0096 

i  Centavo  (Bronze)  *<4°  ™  77.1617  .0048 

I     i/o  zinc  j 


Money  of  Brazil. 
Unit:     Milreis=1000  Reis 

Owing  to  the  depreciation  of  paper  money  practically  all 
~old  and  silver  money  has  disappeared. 

The  milreis  (1,000  reis)  at  par  is  worth  27  pence  English 
money  or  $0.545  United  States  money,  so  that  the  milreis  is 
worth  only  44.4  per  cent  of  its  face  value  and  the  premium 
on  gold  is  125  per  cent.  There  are  no  bank  notes  in  circulation. 
Some  of  the  notes  in  circulation  bear  the  names  of  banks,  but 
the  Government  has  arranged  to  take  them  over,  so  that  they 
are,  to  all  intents  and  purposes,  Government  notes.  The  only 
currency  in  circulation  is  paper  and  subsidiary  nickel  and 
copper  coins. 

During  the  year  1903  the  average  premium  on  gold  was 
226.6  per  cent,  the  highest  being  234.2  per  cent,  the  lowest 
216.2  per  cent. 

The  gold  standard  was  adopted  by  Brazil  in  1849.  The 
mint  par  of  exchange  between  Brazil  and  England  is  1  milreis 
=  26.93  pence,  which  makes  the  20-milreis  piece  worth  £2- 


62 


FOREIGN  EXCHANGE  TEXT  BOOK 


4s  lOd,  and  other  gold  pieces  in  proportion.  Paper  money 
fluctuates  in  value  to  a  considerable  extent.  One  thousand 
milreis  is  called  a  "conto;"  1,000  contos  are  called  "conto 
de  conto." 

The  actual  value  of  the  gold  milreis  in  the  money  of 
the  United  States  as  declared  by  the  Director  of  the  United 
States  mint  is  54  and  6-10  cents  ($0.546).  In  exchange 
transactions  between  this  country  and  the  United  States, 
drafts  and  bills  of  exchange  are  generally  drawn  in  United  States 
dollars  at  exchange  on  New  York  City  or  in  English  money. 

The  weight,  fineness,  etc.,   of  the  coins  of  Brazil  are  as 

follows : 

GOLD  COINS. 


Denomination 

20  Milreis 

10  Milreis 

5  Milreis 


Denomination 
500  Reis 
Milreis 
2  Milreis 


Gross  Weight 
(Grains) 

Fineness 
(Thousandths) 

Pure  Gold 

(Grains) 

Value  in 
United  States 
Money 

276.6973 
138.3486 
69.1743 

917 
917 
917 

253.7314 
126.8657 
63.4328 

$10.9273 
5.4636 
2.7318 

SILVER  COINS. 


Value  in 

Gross  Weight 

Fineness 

Pure  Silver 

United  States 

(Grains) 

(Thousandths) 

(Grains) 

Money 

98.3812 

917 

90.2156 

.2731 

196.7625 

917 

180.4312 

.5463 

393.5250 

917 

360.8625 

$1.0926 

MINOR  COINS. 


Composition 


Denomination 

200  Reis  (Nickel)  )  .,„  , 

100  Reis  (Nickel)  ™%  Sgl 

50  Reis  (Nickel)  j  25/0  mckel 

40  Reis  (Bronze)  (  95%  copper, 
20  Reis  (Bronze)  \  4%  tin  and 
10  Reis  (Bronze)  [  1%  zinc 


Gross  Weight 
(Grains) 


Legal  Tender 


Value 


•«*?!  To  amount  of      $0.1092 


108. 0264 J 

108'o2fi4lToam0untof 
1U8.U^D4<         onn  T?AIC 

54.0132         200  Reis. 


.0546 
.0273 

$0.0218 
.0109 
.0054 


Money  of  Chile. 
Unit:     Peso=100  Centavos 

Chile  is  nominally  on  a  gold  basis  but  the  currency  is 
inconvertible  paper. 

Silver  is  legal  tender  to  the  amount  of  50  pesos  between 
individuals,  but  full  legal  tender  to  the  government.  Gold  is 
full  legal  tender.  The  only  mint  in  Chile  is  that  at  Santiago. 
The  law  of  March  9,  1904,  provides  for  the  coinage  of  new 
copper  coins  as  shown  below: 

The  actual  value  of  the  gold  peso  in  the  money  of  United 
States  as  declared  by  the  Director  of  the  United  States  mint  is 
36  5-10  cents  (SO. 365).  In  exchange  transactions  between 
this  country  and  United  States  drafts,  checks  and  bills  of 
exchange  are  generally  drawn  in  United  States  dollars  at 
exchange  on  New  York  City,  or  in  pesos. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD 


63 


The  value  of  the  gold  peso  is  fixed  by  law  at  1  shilling  6  pence 
(English  money),  or  36^  cents  ($0.365)  United  States  money, 
and  the  10  peso  (doubloon)  at  15  shillings  (English),  or  $3.65 
United  States  money. 

PAPER  MONEY. 

Paper  money  is  usually  at  a  heavy  discount.  Notes  are 
issued  by  about  fifteen  banks  and  are  subject  to  a  variable 
gold  premium,  and  must  be  handled  with  caution  on  account 
of  man  excellent  counterfeits. 


Gross  Weight 
Denomination  (Grains) 

Condor  (20  Pesos)  184.9115 
Doubloon  (  10  Pesos)  92  .  4557 
Escudo  (5  Pesos)  46  .  2278 

Peso  9  .  2455 


GOLD  COINS. 

Fineness 
(Thousandths) 

916§ 
916f 


916| 

The  gold  peso  is  not  coined. 


Pure  Gold 
(Grains) 

169.5022 

84.7511 

42.3755 

8.4751 


Value  in 

United  States 

.  Money 

$7.2998 

3.6499 

1.8249 

.3649 


There  are 
1000  fine,  the 
308.640  grains. 
pieces,  varying 


Denomination 

Peso 

20  Centavos 

10  Centavos 

5  Centavos 


SILVER  COINS. 

two  silver  pesos  in  circulation,  one  being  835- 
other   700-1000   fine,  both  being   20  grams  or 
There  are  also  50,  20,  10  and  5  silver  centavo 
from  200-1000  to  835-1000  fine. 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

308.6471 

835 

257.7203 

$0.3649 

61.7294 

835 

51.5440 

.0730 

30.8647 

835 

25.7720 

.0365 

15.4323 

835 

12.8860 

.0183 

MINOR  COINS. 


Denomination  Composition 

New  Issue  (Copper). 


}  Centavo 
Old  Issue  (Copper). 
2  Centavos 


1  Centavo 
J  Centavo 


95%  copper  and 
5%  nickel 


Gross  Weight 
(Grains) 

108.0240 
77.1600 
54.0120 
38.5800 

108.0264 
77.1617 
46.2970 


Legal  Tender 

(No  data) 


(No  data) 


Value 

$0.0091 
.0073 
.0036 
.0018 

$0.0072 
.0036 
.0018 


Money  of  Colombia. 
Unit:     Dollar=100  Cents 

By  the  law  of  October  25,  1903,  Colombia  adopted  the 
gold  standard  prescribing  as  a  monetary  unit  a  gold  dollar 
weighing  1,672  grams  (25.8  grains)  and  900  fine,  the  actual 
value  being  the  same  as  that  of  the  United  States  gold  dollar. 


64 


FOREIGN  EXCHANGE  TEXT  BOOK 


The  new  law  provides  that  in  public  or  private  transactions 
it  is  permissible  to  stipulate  payment  in  either  the  gold  monetary 
unit  or  paper  money.  If  contracts  stipulate  payment  in  gold, 
the  contract  is  complied  with  by  the  payment  of  an  equivalent 
sum  in  paper  money  at  the  rate  of  exchange  ruling  on  the  day 
of  payment.  All  obligations  contracted  for  legal  tender  (moneda 
corriente)  in  which  no  special  class  of  money  is  stated,  will  be 
understood  as  having  been  contracted  for  and  will  be  payable  in 
bills  of  forced  currency. 

The  actual  currency  of  Colombia  is  inconvertible  paper. 
Gold  is  usually  at  a  high  premium, 

In  exchange  transactions  with  the  United  States  drafts, 
checks  and  bills  of  exchange  are  usually  drawn  in  United  States 
dollars  at  exchange  on  New  York.  The  money  in  circulation 
consists  of  a  paper  currency,  and  gold,  silver  and  nickel  coins, 
as  follows: 

PAPER  MONEY. 

Notes  issued  by  the  Government  and  banks  in  denomina- 
tions of  5,  10,  50,  100  and  500  pesos. 


Denomination 
Double  Condor 
Condor 


Gross  Weight 
(Grains) 

497.8178 
248.9089 


GOLD  COINS. 

Fineness 
(Thousandths) 

900 
900 


Pure  Gold 
(Grains) 

448.0360 
224.0180 


Value  in 

United  States 

Money 

$19.2952 
9.6476 


There  are  also  gold  coins  called  doubloons,  half-doubloon 
and  quarter-doubloon  in  circulation. 


SILVER  COINS. 


Denomination 

Peso 

2  Decimo 

Decimo 

Half  Decimo 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 

United  States 
Money 

385.8089 

900 

347.2280  1 

Fluctuates 

77.1617 
38.5808 
19.2904 

835 
835 
835 

64.4300  J 
32.2150  1 
16.1075 

according  to 
price  of 
silver. 

MINOR  COINS. 
5,  2  and   J  Centavo  of  nickel. 


Money  of  Ecuador. 
Unit:     Sucre=100  Centavos 

Ecuador  has  at  present  the  single  silver  standard.  Up  to 
1884  the  currency  of  Ecuador  consisted  of  the  coins  of  the 
neighboring  countries.  Since  1884  a  national  currency  has 
been  introduced  with  the  sucre  or  peso,  900-thousandths  fine, 
as  the  monetary  unit.  There  is,  however,  a  paper  currency  at 
present  depreciated  over  50  per  cent.  There  is  no  mint  in  the 
country. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  65 

The  actual  value  of  the  gold  sucre  in  the  money  of  the 
United  States  as  declared  by  the  director  of  the  United  States 
mint  is  48  and  7-10  cents  ($0.487).  In  exchange  transac- 
tions with  the  United  States  drafts,  checks  and  bills  of  exchange 
are  usually  drawn  in  United  States  dollars  at  exchange  on 
New  York  City.  The  money  in  circulation  consists  of  paper 
currency  and  gold,  silver  and  nickel  and  bronze  coins  as  follows: 

PAPER  MONEY. 

Notes  issued  by  banks  in  denominations  of  5,  10,  50,  100 
and  500  sucres. 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

10  Sucres  125.5576  900  113.0018  $4.8665 

There  is  also  in  circulation  the  gold  condor  ($9.65)  and  the 
double  condor  ($19.30)  pieces. 

SILVER  COINS, 

Value  in 

Gross  Weight  Fineness  Pure  Silver  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

Sucre                              385.8089  900  347.2280  $0.4866 

Peseta (20 centavos)    77.1617  900  69.4456  .0973 

Real  ( 1 0  Centavos)       38.5808  900  34.7228  .0486 
Midio-Real 

(SCentavos)              19.2904  900  17.3614  .0243 

MINOR  COINS. 
5,  1  and  J-centavo  pieces  of  nickel  and  2  and  1-centavo  pieces  of  bronze. 

Money  of  French  Guiana. 
Unit:     Franc=100  Centimes 

Although  the  unit  of  money  in  this  country  is  the  same  as 
in  France  and  the  coins  of  that  country  are  in  general  use, 
accounts  are  usually  kept  in  pesos  and  centavos,  or  dollars  and 
cents,  as  in  the  other  South  American  countries. 

Money  of  Paraguay. 
Unit:     Peso=8  Reals 

The  money  of  account  of  Paraguay  is  the  peso,  divided 
into  8  reals.  It  is  also  divided  into  100  centavos.  The  country, 
however,  has  a  depreciated  paper  currency.  The  gold  onza  is 
rated  officially  at  \1\  paper  pesos,  making  the  paper  peso 
equal  to  1.3617  grams  or  21.01375  grains,  fine  gold.  Five- 
franc  pieces,  venezolanos,  and  other  piastres  of  the  same  kind 
are  in  like  manner  reckoned  as  equivalent  to  \\  paper  pesos. 

A  financial  law  promulgated  October,  1903,  fixes  the  value 
of  gold,  silver  and  paper  currency  in  Paraguay.  This  law 


66  FOREIGN  EXCHANGE  TEXT  BOOK 

fixes  the  gold  and  silver  of  the  Argentine  Republic  as  the  legal 
currency  in  Paraguay.  The  United  States  $20  gold  piece  is 
worth  $20.40,  and  the  English  sovereign  $5  in  Paraguayan 
gold.  The  banks  and  exchange  houses  observe  this  law.  For 
instance,  in  making  a  draft  on  the  United  States  they  will  take 
each  dollar  at  $1.02,  when  it  really  bears  a  premium  of  3J  per 
cent  mint  value  in  the  Argentine  gold.  The  exchange  as  a 
rule  is  quoted  at  the  rate  of  the  day  on  which  Argentine  gold 
is  being  sold.  At  present  Argentine  gold  is  stationary,  its 
rating  being  $8.75,  which  means  that  $8.75  Paraguayan  paper 
will  purchase  $1  Argentine  gold.  This  makes  the  Paraguayan 
paper  peso  or  dollar  worth  at  present  11J  cents  gold.  In  addi- 
tion to  the  foregoing  quotations  of  American  gold  there  is  a 
bank  discount  and  a  computation  of  interest  to  be  calculated. 
The  silver  pieces  of  25  grams  (385.800  grains)  900-thousandths 
fine  will  be  valued  at  94  cents  (centavos)  Paraguayan,  and 
the  fractions  their  respective  values  accordingly. 

Although  the  money  of  account  of  this  country  is  as  above 
noted,  the  money  in  circulation  is  principally  that  of  Argentine 
Republic  and  Brazil.  Very  little  money  is  in  circulation  or 
needed,  and  there  are  comparatively  very  few  exchange  trans- 
actions bet\veen  this  country  and  United  States.  We  are  unable 
to  give  a  list  of  gold  and  silver  coins,  or  their  value.  For  minor 
coins  see  below: 

MINOR  COINS. 

Gross  Weight 
Denomination  Composition  (Grains)  Legal  Tender  Value 

NICKEL. 

20  Centavos  or  Cents  f  75%  copper,  61 .  7294  ]  To  amount  of      $0 .  1929 

10  Centavos  or  Cents  \           and  46 .  2970  [•  2%  of  the  pay-        .  0964 

5  Centavos  or  Cents  (  25%  nickel  30.8647  ment.                    .0482 


Money  of  Peru. 
Unit:     Sol=10  Dineros  of  10  Centavos 

The  unit,  the  silver  sol,  is  the  same  weight  and  fineness  as 
the  French  5-franc  piece.  The  free  coinage  of  silver  was  sus- 
pended in  April,  1897,  and  by  the  Act  of  December  27,  1897, 
the  gold  standard  was  re-established,  gold  having  been  demone- 
tized by  Act  of  December  30,  1872,  and  thereafter  went  out  of  cir- 
culation. The  new  gold  coin,  called  the  libra  peruano  (Peru- 
vian pound)  is  of  the  same  weight  and  fineness  as  the  pound 
sterling  of  England  and  both  are  now  in  circulation  in  Peru  con- 
currently, with  the  silver  sol  at  the  legal  par  of  equality,  which 
is  that  of  1  to  31.  This  ratio  values  the  sol  at  24  pence  (Eng- 
lish), (48  cents  United  States)  and  the  libra  at  10  sols. 

Paper  money  disappeared  from  circulation  in  1887,  and 
its  emission  has  ever  since  been  prohibited. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  67 

The  actual  value  of  the  gold  sol  in  the  money  of  the  United 
States  as  declared  by  the  Director  of  the  United  States  mint 
is  48  and  7-10  ($0.487).  In  exchange  transactions  between 
Peru  and  the  United  States,  drafts  and  bills  of  exchange  are 
usually  drawn  in  United  States  dollars  at  exchange  on  New 
York  City,  unless  otherwise  preferred.  The  money  in  circula- 
tion consists  of  gold,  silver  and  copper  coins.  This  country 
mines  a  vast  quantity  of  silver. 

The  gold  "libra,"  equal  to  10  sols,  is  worth  $4.8665  in 
United  States  money. 

The  weight,  fineness,  etc.,  of  the  coins  of  Peru  are  as  follows: 

GOLD  COINS. 

Value  in 

Gross  Weight  Fineness  Pure  Gold  United  States 

Denomination  (Grains)  (Thousandths)  (Grains)  Money 

Libra  123.2744  916§  113.0015  $4.8665 

Half  Libra  61.6372  916$  56.5007  2.4332 


SILVER  COINS. 


Denomination 

Sol 

Half  Sol 
Fifth  Sol 
Dinero  (Dime) 
Half  Dinero 


Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

385.8089 

900 

347.2280 

$0.4866 

192.9044 

900 

173.6140 

.2433 

77.1617 

900 

69.4456 

.0973 

38.5808 

900 

34.7228 

.0486 

19.2904 

900 

17.3614 

.0243 

The  minor  coins  are  2  and  1  centavo  pieces  of  bronze. 


Money  of  Uruguay. 
Unit:     Peso=100  Centavos 

The  actual  value  of  the  gold  peso  of  this  country  in  the 
money  of  the  United  States  as  declared  by  the  Director  of  the 
United  States  mint,  is  $1.034.  In  exchange  transactions  with 
the  United  States,  drafts,  checks  and  bills  of  exchange  are 
usually  drawn  in  United  States  dollars  at  exchange  on  New 
York  City  unless  preferred  in  the  money  of  the  country.  The 
money  in  circulation  consists  of  paper  currency  and  gold,  silver 
and  minor  coins  as  follows: 

PAPER  MONEY. 

Notes  issued  by  the  local  and  foreign  banks  in  various 
denominations  of  pesos. 

GOLD  COINS. 

Peso  or  patacoe  ($1.04),  1\  pesos  or  2  patacoe  pieces  ($2.59), 
5  pesos  or  4  patacoe  pieces  ($5.17). 


68 


FOREIGN*  EXCHANGE  TEXT  BOOK 


SILVER  COINS. 

Peso  ($1.04),  50  centavos  ($0.51),  20  centavos  ($0.21), 
10  centavos  ($0.11).  The  values  of  these  silver  coins  are  esti- 
mated at  same  value  as  for  the  gold  pieces. 

MINOR  COINS. 
No  data.     There  is  no  mint  in  this  country. 


Money  of  Venezuela. 
Unit:     Bolivar=20  Centavos 

'The  monetary  unit  is  the  venezolano  or  peso,  divided  into 
100  centavos,  a  silver  coin  equal  in  weight  and  fineness  to  the 
French  silver  5-franc  piece.  The  ratio  of  gold  to  silver  is  1  to 
15£.  The  only  difference  between  the  French  monetary  system 
and  that  of  Venezuela  is  that  whereas  the  French  5-franc  piece 
is  unlimited  tender,  the  5-bolivar  piece  or  venezolano  is  legal 
tender  only  to  the  amount  of  500  bolivars,  or  about  $100  in 
United  States  gold  coin.  In  this  respect  Venezuela  is  more 
like  a  single  gold  standard  country.  For  convenience,  however, 
it  is  generally  classed  among  double  standard  countries. 

The  actual  value  of  the  gold  bolivar  in  the  money  of  the 
United  States  is  19  and  3-10  cents  ($0.193).  In  exchange 
transactions  with  the  United  States,  drafts  and  bills  of  exchange 
are  usually  drawn  in  United  States  dollars  at  exchange  on 
New  York  City  unless  preferred  in  the  money  of  some  other 
country. 

The  money  in  circulation  consists  of  paper  currency  and 
gold,  silver  and  bronze  coins  as  follows: 

PAPER  MONEY. 
Notes  issued  by  banks  in  various  denominations  of  bolivars. 


GOLD  COINS. 


Denomination 

100  Bolivars 

50  Bolivars 

20  Bolivars 

10  Bolivars 

5  Bolivars 


Gross  Weight            Fineness               Pure  Gold 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

497.8178 

900 

448.0360 

$19.2952 

248.9089 

900 

224.0180 

9.6476 

99.5635 

900 

89.6072 

3.8590 

49.7817 

900 

44.8036 

1.9293 

24.8908 

900 

22.4818 

.9647 

SILVER  COINS. 


Denomination 

Gross  Weight            Fineness              Pure  Silver 
(Grains)           (Thousandths)           (Grains) 

Value  in 
United  States 
Money 

5  Bolivars 

385.8089 

900 

347.2280 

$0.9352 

2  Bolivars 

154.3235 

835 

128.8601 

.3470 

Bolivar 

77.1617 

835 

64.4300 

.  1735 

Half  Bolivar 

38.5808 

835 

32.2150 

.0867 

Quarter  Bolivar 
Fifth  Bolivar 

19.2904 
15.4323 

835 
835 

16.1075 
12.8860 

.0433 
.0347 

MINOR  COINS — No  data. 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  69 

Miscellaneous. 

AFGHANISTAN  uses  British  India  and  Persian  money. 
ANDORA:     Is  the  same  as  Spain. 

ARABIA:  One  krusch  equal  to  40  diwani,  equal  to  1§ 
marks  ($0.395);  1  mahmudi  equal  to  20  gass,  equal  to  about 
1-5  of  a  mark,  or  about  5  cents.  One  makkafhaler  equal 
to  80  cabir,  equal  to  3.55  marks,  or  about  85  cents,  United 
States  money. 

CONGO  STATES  use  French,  German  and  English  coins,  and 
brass  wire. 

HIMALAYA  STATES:  One  mohar  equal  to  6  annas;  8  pies 
equal  to  80-100  of  a  mark,  or  about  19  cents  United  States 
money.  One  mohri  rupee  equal  to  2  mohar  or  about  38  cents 
United  States  money. 

KOREA  uses  same  money  as  China.  Recently  one  yang 
equal  to  10  mum,  or  about  24  cents  in  United  States  money. 

LUXEMBURG  uses  French,  Dutch  and  German  money. 
MONTENEGRO  uses  Austrian,  Turkish  and  Russian  money. 


Meaning  of  16  to  1. 

The  phrase  "16  to  1"  as  applied  to  the  coinage,  means 
that  the  mint  value  of  IB  ounces  of  silver  shall  be  equal  to  the 
mint  value  of  one  ounce  of  gold;  that  is,  that  16  ounces  of  silver 
shall  be  coinabJ.e  ~'nto  as  many  standard  silver  dollars  as  I  ounce 
of  gold  is  coinaole  into  standard  gold  dollars. 


Standard  Bullion. 

Standard  bullion  contains  900  parts  of  gold  or  pure  silver 
and  100  parts  of  copper  alloy. 

The  coining  value  of  an  ounce  of  PURE  gold  is  $20.67183, 
and  the  coining  value  of  an  ounce  of  STANDARD  gold  is  $18.60465. 

The  coining  value  in  standard  silver  dollars  of  an  ounce 
of  PURE  SILVER  is  $1.2929,  and  the  coining  value  of  an  ounce 
of  STANDARD  silver  is  $1.1636. 


70  FOREIGN  EXCHANGE  TEXT  BOOK 

Value  of  standard  gold  coins  or  bullion,  900-thousandths  fine, 
based  upon  the  United  States  Government  coining  value  of 
an  ounce  of  standard  gold,  namely:  $18.60465  per  ounce  of 
480  grains,  from  1  to  9  ounces,  with  decimal  for  figuring 
from  1  to  1,000  ounces. 

1  Ounce,    value  $  18.60465116 

2  Ounces,  value       37.20930232 

3  Ounces,  value       55.81395349 

4  Ounces,  value       74.41860465 

5  Ounces,  value       93.02325581 

6  Ounces,  value     111.62790698 

7  Ounces,  value     130.23255814 

8  Ounces,  value     148.83720930 

9  Ounces,  value     167.44186046 

NOTE. — Move  decimal  one  figure  to  right  for  tens  of  ounces. 

Move  decimal  two  figures  to  right  for  hundreds  of  ounces. 
Move  decimal  three  figures  to  right  for  thousands  of  ounces. 


Seigniorage. 

This  term  as  used  in  the  United  States,  means  the  profit 
arising  from  the  coining  of  bullion.  The  Government  does  not 
purchase  gold  bullion,  but  coins  it  on  private  account;  that  is, 
standard  gold  bullion  may  be  deposited  at  the  mints  in  any 
amount,  to  be  coined  for  the  benefit  of  the  depositor,  without 
charge  for  coinage.  There  is  no  profit  from  the  coinage  of  gold 
bullion,  the  face  value  of  gold  coins  being  same  as  their  bullion 
value.  But  at  the  present  ratio  of  16  to  1  the  face  value  of  the 
silver  dollar  is  greater  than  its  bullion  value;  therefore,  when 
silver  bullion  is  purchased  and  coined  into  dollars,  there  is  a 
profit  arising  from  such  coinage,  the  amount  of  which  depends 
upon  the  price  paid  for  the  bullion.  For  example,  there  are 
371^  grains  of  pure  silver  in  a  dollar,  and  there  are  480  grains 
of  pure  silver  in  a  fine  ounce.  The  coinage  value  of  a  fine 
ounce  is  therefore  $1.2929.  If  the  fine  ounce  can  be  purchased 
for  70  cents,  the  profit  of  its  coinage  (the  seigniorage)  is  $0.5929, 
und  the  profit  on  the  37 1£  grains  of  pure  silver  in  the  single 
dollar  is  $0.4586,  which  is  the  difference  between  the  actual  cost 
of  the  bullion  in  the  dollar  and  the  nominal  value  of  the  coin. 

The  silver  purchased  by  the  Government  is  carried  on  the 
books  of  the  treasury  at  its  actual  cost,  and  the  seigniorage  is 
declared  on  the  coinage  of  each  month  and  paid  into  the  treasury. 

Coinage  of  Gold. 

In  the  United  States  there  is  free  and  unlimited  coinage  of 
gold.  Anyone  may  deposit  standard  gold  bullion  at  the  mints 
without  charge  for  coining.  When  other  than  standard  bullion 
is  received  for  coinage  a  charge  is  made  for  parting,  or  for  refin- 
ing, or  for  copper  alloy,  as  the  case  may  be.  Refining  is  elimi- 
nation from  the  bullion  of  all  base  metal.  Parting  is  separation 


THE  MONETARY  SYSTEMS  OF  THE  WORLD  71 

of  any  silver  which  may  be  contained  in  the  bullion.  The 
depositor  receives  in  gold  coin  the  full  value  of  the  gold  in  his 
bullion,  less  charges  for  alloy,  parting,  etc. 

Adoption  of  the  Gold  Standard. 

Since  the  year  1894  the  following  countries  have  adopted 
the  gold  standard: 

Chile  in  1895  Costa  Rica  in  1896  Russia  in  1897 

Japan  in  1897  British  India  in   1899,  at  rate  of  15  rupees  to  1 

pound  sterling. 

United  States  in  1900    Ecuador  in  1900  San  Domingo"(U.  S.  Stan- 

dard) in  1901 
Colombia  in  1903  Panama  in  1903  Mexico  in  1904 

The  Term  "Ratio." 

The  term  "ratio"  in  coinage  is  used  to  express  the  equiva- 
lent between  gold  and  silver  under  the  varying  mint  laws. 
Thus  it  will  be  seen  that  the  gold  5-franc  piece  weighs  1.613 
grams,  while  the  silver  5-franc  piece  weighs  25  grams — the 
relation  is  therefore  1  to  15 \  (arrived  at  by  dividing  the  weight 
of  the  silver  piece  by  the  weight  of  the  gold  piece).  In  other 
words,  a  pound  of  gold  would  be  coined  into  as  many  francs  as 
15^  pounds  of  silver;  therefore  it  is  said  that  the  coining  rate 
of  France  is  1  to  15£.  This  applies,  however,  to  full  debt-paying 
silver  ONLY,  for  it  will  be  seen  that  while  the  subsidiary  silver 
pieces  of  France  bear  the  same  relation  in  weight,  the  fineness 
is  less,  making  the  pieces  less  valuable.  In  many  countries  the 
same  result  is  effected  by  reducing  the  weight  instead  of  the 
fineness  of  subsidiary  coins.  It  is  for  this  reason  such  coins 
are  legal  tender  for  small  amounts  only,  rarely  over  $10  in  any 
civilized  country,  and  they  are  made  cheaper  to  prevent  their 
being  exported,  being  intended  solely  for  domestic  use. 

In  a  like  manner,  minor  coins,  which  are  intrinsically  of 
little  value,  are  legal  tender  for  very  small  amounts  —  say 
25  to  50  cents.  In  most  countries  nickel  and  bronze  are  used 
for  minor  coins. 

The  ratio  for  coining  when  established  by  each  nation 
was  intended  to  represent  approximately  the  actual  value 
relation  between  gold  and  silver,  and  it  may  be  said  that  for 
many  years  this  was  nearly  correct.  But  the  great  increase 
in  the  production  of  silver  since  1873  and  the  restrictions  of 
its  use  by  many  countries  caused  such  a  reduction  in  its  market 
value,  that  the  ratio  is  now  nearer  27  to  1  of  gold,  consequently 
almost  all  nations  have  discontinued  the  free  and  unlimited 
coinage  of  silver  into  full  debt-paying  money,  for  it  is  obvious 
that  if  any  one  nation  were  to  do  so  the  silver  product  costing 
but  65  cents  per  ounce  would  be  brought  to  that  nation's  mints 
and  coined  into  pieces  worth  $1.2929  per  ounce,  wrhich  could  be  used 
to  pay  debts  or  purchase  commodities  in  that  country.  In  other 
words,  they  would  make  about  64  centsper  ounce  onthe  transaction. 


72 


FOREIGN  EXCHANGE  TEXT  BOOK 


The  gold  monetary  units  of  principal  countries  of  the  world  and  their 
weight,  fineness  and  value  expressed  in  terms  of  the 
United  States  gold  dollar. 

Value  in 
Gross  Weight    Fineness       Pure  Gold       United  States 

Country                Name  of  Unit 

(Grains)    (Thousandths)   (Grains) 

Money 

Alaska 

Dollar 

25 

.8 

900 

23 

.22 

SI 

.00 

Algeria 

Franc 

4 

.97817 

900 

4 

.48036 

.19295 

Australia 

Pound  Sterl. 

123 

.2744 

9163 

113 

.0015 

4 

.8665 

Austria-Hung. 

Kronen 

5 

22776 

900 

4 

.70498 

.20262 

Bahama  (I.) 

Pounds  Sterl. 

123 

2744 

916$ 

113 

.0015 

4 

.8665 

Barbadoes  (I.) 

Pounds  Sterl. 

123 

.2744 

9163 

113 

.0015 

4 

.8665 

Belgium 

Franc 

4 

.97817 

900 

4 

.48036 

.19295 

Bermuda  (I.) 

Pounds  Sterl. 

123 

.2744 

9163 

113 

.0015 

4 

.8665 

Brazil 

Milreis 

13 

.83486 

917 

12 

.68657 

.54636 

Bulgaria 

Lew 

4 

.97817 

900 

4 

.48036 

.19295 

Canada 

Dollar  (U.S.) 

25 

,8 

900 

23 

.22 

1 

.00 

Cape  Colony 

Pounds  Sterl. 

123 

.2744 

9163 

113 

.0015 

4 

.8665 

Chile 

Peso 

9 

.24557 

9163 

8 

.47511 

.36499 

Colombia 

Dollar 

25 

.80287 

900 

23 

.22258 

1 

.00 

Costa  Rica 

Colon 

12 

.00637 

900 

10 

.80573 

1 

.46536 

Cuba 

Peseta 

(Legal  unit) 

4 

.97817 

900 

4 

,48036 

.19295 

Denmark 

Kroner 

6 

91415 

900 

6 

22274 

.26799 

Egypt 

Egyptian  P'.d 

131 

1750 

875 

114 

,7781- 

4 

.9430 

England 

Pounds  Sterl. 

123 

2744 

916$ 

113 

.0015 

4 

.8665 

Fiji  (I.) 

Pounds  Sterl. 

123 

2744 

9163 

113 

.0015 

4 

.8665 

Finland 

Fin  mark 

4 

97847 

900 

4 

43063 

19296 

France 

Franc 

4 

97817 

900 

4 

48036 

.19295 

Germany 

Reichsmark 

6 

14588 

900 

5 

53130 

23821 

Greece 

Drachma 

4 

97817 

900 

4 

.48036 

.19295 

Hawaii 

Dollar  (U.S.) 

25 

8 

900 

23 

,22 

1 

.00 

Hayti 

Gourde 

24 

89084 

900 

22 

40176 

.96476 

Holland 

Gulden 

10 

37054 

900 

9 

33348 

.40195 

Ireland 

Pounds  Sterl. 

123 

2744 

9163 

113 

0015 

4 

.8665 

Italy 

Lire 

4 

,97817 

900 

4 

48036 

19295 

Jamaica  (I.) 

Pounds  Sterl. 

123 

2744 

916§ 

113 

0015 

4 

.8665 

Japan 

Yen 

12. 

86024 

900 

11. 

57422 

49845 

Java 

Gulden  (Hoi.) 

10. 

37054 

900 

9. 

33348 

40195 

Martinique 

Fran  c  (  France)    4  . 

97817 

900 

4. 

48036 

19295 

Mexico 

Peso 

12 

86023 

900 

11. 

57421 

4984 

Natal 

Pounds  Sterl. 

123 

2744 

916f 

113. 

0015 

4 

8665 

New  Zealand 

Pounds  Sterl. 

123 

2744 

91F3 

113 

0015 

4, 

8665 

Norway 

Kronor 

6 

91415 

900 

6. 

22274 

26799 

Panama 

Balboa 

25. 

8 

900 

23. 

22 

1. 

00 

Porto  Rica 

Dollar(U.S.) 

25. 

8 

900 

23. 

22 

1 

00 

Portugal 

Milreis 

27. 

3692 

916§ 

25. 

0885 

1. 

0804 

Roumania 

Lei 

4. 

97817 

900 

4. 

48036 

19295 

Russia 

Ruble 

13. 

27584 

900 

11. 

94826 

51456 

Scotland 

Pounds  Sterl. 

123 

2744 

9163 

113. 

0015 

4. 

8665 

Servia 

Dinar 

4 

97817 

900 

4. 

88035 

19295 

S.  African  Rep. 

Pounds  Sterl. 

123 

2744 

9163 

113. 

0015 

4. 

8665 

Spain 

Peseta 

4 

97817 

900 

4. 

48036 

19295 

Sumatra 

Gulden 

10. 

37054 

900 

9. 

33348 

40195 

Sweden 

Kronor 

6. 

91415 

900 

6. 

22274 

26799 

Switzerland 

Franc 

4 

97817 

900 

4. 

48036 

19295 

Tasmania 

Pounds  Sterl. 

123, 

2744 

9163 

113. 

0015 

4. 

8665 

Tunis 

Pounds  Sterl. 

123, 

.2744 

9163 

113. 

0015 

4. 

8665 

Turkey 

Turkish  P'd 

111. 

3660 

9163 

102. 

0855 

4. 

3964 

United  States 

Dollar 

25. 

8 

900 

23. 

22 

1. 

00 

Venezuela 

Bolivar 

4. 

97817 

900 

4. 

48036 

1929*— 

Wales 

Pounds  Sterl. 

123. 

2744 

9163 

113. 

0015 

4"! 

8665 

THE  MONETARY  SYSTEMS  OF  THE  WORLD 


73 


Gold  monetary  units  of  foreign  countries  arranged  in  the  order  of  their 

intrinsic  value. 


Countries 

Units 

Value 

Egypt 

Pound 

$4.9430 

Great  Britain 

and  Colonies 

Pounds  Sterling 

4.8665 

Turkey 

Pound 

4.3964 

Portugal 

Milreis 

1  .  0804 

United  States 

Dollar 

1.00 

Canada 

Dollar  (U.  S.) 

1.00 

Colombia 

Dollar 

1.00 

Panama 

Balboa 

1.00 

Hayti 

Gourde 

.96476 

Brazil 

Milreis 

.54636 

Russia 

Ruble 

.51456 

Japan 

Yen 

.49845 

Mexico 

Peso 

.4984 

Costa  Rica 

Colon 

.46536 

Holland  and 

Colonies 

Gulden 

.40195 

Chile 

Peso 

.36499 

Denmark 

1 

.26799 

Norway 

[  Kroner 

.26799 

Sweden 

J 

.26799 

Germany 

Reichsmark 

.23821 

Austria-  Hungary 

Kronen 

.20262 

Belgium 

Franc 

.19295 

Bulgaria 

Lew 

.19295 

Cuba 

Peseta 

.19295 

Finland 

Finmark 

.19295 

France 

Franc 

.19295 

Italy 

Lire 

.19295 

Rou  mania 

Lew 

.19295 

Servia 

Dinar 

.19295 

Spain 

Peseta 

.19295 

Switzerland 

Franc 

.19295 

Venezuela 

Bolivar 

.  19293- 

^5 


CHAPTER  III. 

CONVERSION  OF  FOREIGN  MONEY  INTO 

UNITED  STATES  MONEY  AND 

VICE  VERSA. 


The  methods  of  figuring  or  converting  the  monies  of  the 
different  foreign  countries  into  the  money  of  the  United  States 
and  vice  versa  are  not  generally  understood  even  by  dealers  in 
foreign  exchange,  for  the  reason  that  printed  tables  are  pro- 
vided and  generally  used  for  such  purpose,  which  not  only 
insure  accurate  computation  but  save  much  time  and  labor. 
Students,  however,  who  desire  to  acquire  a  thorough  knowl- 
edge of  the  science  of  foreign  exchange,  should  be  able  to  figure 
all  transactions  without  the  use  of  tables.  The  operations  in 
figures  are  shown  in  the  following  examples: 


ENGLISH  MONEY. 
Table. 

4  farthings  (far.)  =1  penny 

12  pence  (d)  =  shilling 

20  shillings  (s.)  =1  pound  or  sovereign 

21  shillings  =1  guinea 

£         s.           d.  far. 

1  =  20  =  240  =  960 

1  =     12  =  48 

1  =  4 


EXAMPLE  1. 
ADDITION,  ENGLISH  MONET. 


£ 

s. 

d. 

240 

12 

8 

15 

10 

5 

5 

5 

4 

ANSWER   £261  8s  5d 

EXPLANATION. — Since  12  pence  equal  1  shilling  and  the 
total  of  pence  is  17,  carry  1  to  shillings,  leaving  5  pence.  As 
the  total  of  shillings  is  28  (including  1  forward  from  pence)  and 
there  are  20  shillings  to  the  pound,  carry  1  to  pounds,  leaving 
8  shillings. 

75 


76  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  2. 
MULTIPLICATION,  ENGLISH  MONEY. 

£  s.  d. 

215  12  8 

4 


ANSWER    £862  10s.  8d. 


EXPLANATION. — 4  times  8  pence  =  32  pence  or  2s  8d, 
therefore  carry  2  to  shillings.  4  times  12s  =  48s  plus  2s  =  50s, 
or  £2  10s,  therefore  carry  2  to  pounds,  leaving  10s.  4  times 
£2 15  =  £860,  plus  £2  carried  from  shillings  =  £862. 


EXAMPLE  3. 
SUBTRACTION,  ENGLISH  MONEY. 

£  s.  d. 

215  12  8 

212  15  10 


ANSWER    £     2  16s.  lOd. 


EXPLANATION. — Since  lOd  cannot  be  subtracted  from  8d, 
add  12d  to  the  minuend  (upper  figures),  making  20d.  lOd 
from  20  =  10d.  Since  16s  (includes  Is  brought  forward)  cannot 
be  subtracted  from  12s,  add  20  to  the  minuend,  making  32s. 
16s  from  32s  =  16s.  Carry  1  to  pounds.  £213  from  £215  =  £2. 


EXAMPLE  4. 
DIVISION,  ENGLISH  MONEY. 

£  s.  d. 

4  )25  10  4 


ANSWER    £  6  7s  7d. 


EXPLANATION. — Since  4  into  25  goes  6  times,  leaving 
remainder  of  £1  or  20s,  carry  20  to  shillings,  making  30s. 
4  into  30  goes  7  times,  leaving  remainder  of  2s  or  24d,  thus  mak- 
ing 28d  into  which  4  goes  7  times. 


EXAMPLE  5. 

REDUCING  POUNDS,  SHILLINGS  AND  PENCE  TO  DECIMAL  OF  POUND  FOR 
CONVENIENCE  IN  FIGURING: 
Reduce  £525   10s  6d  to  pounds  and  decimal. 
Operation:    £525=£525. 

s.     10=          .50 
d.      6=          .025 


ANSWER  (Decimal)       £525.525 

EXPLANATION.— Multip«>    shillings    by    .05    because    Is    is 
1-20   or  5-100  of   a   pound.     Multiply  the  pence  by  .004  1-6 


EXAMPLES  IN  THE  CONVERSION  OP  MONEY  77 

because  Id  is  1-240  or  4&  thousandths  of  a  pound.  To  avoid 
the  use  of  the  fraction  J,  add  1  if  amount  is  over  12  and  2  if  over 
35,  and  result  will  be  the  same. 

NOTE. — The  reducing  of  pounds,  shillings  and  pence  to  decimal  as 
above  shown,  simplifies  the  process  of  converting  English  money  into 
United  States  money,  as  will  be  seen  by  examples  following. 

EXAMPLE  6. 

CONVERSION:  ENGLISH  MONEY  INTO  UNITED  STATES  MONEY: 

To  find  the  equivalent  in  United  States  money  of  £525  10s.  6d.,  at 
"rate  of  exchange,"  &4.96J  per  pound: 

Operation:    £525=£525. 

s.   10=          .50 
d.     6==  .  025 


£525.525 

4.9650  RATE 


26276250 
3153150 
4729725 
2102100 

ANSWER— 2609.2316250       ($2609.23) 

NOTE. — See  Example  5  for  explanation  of  reducing  pounds,  shillings 
and  pence  to  decimal. 

EXPLANATION. — Reduce  pounds,  shillings  and  pence  to 
decimal  as  explained  in  Example  5.  Multiply  the  decimal  by 
rate  of  exchange  ($4.965),  which  gives  amount  in  dollars  and 
cents  United  States  money. 

NOTE. — See  Example  7  showing  conversion  of  same  amount  United 
States  money  ($2.609.23),  into  English  money,  which  verifies  correctness 
of  figures  iv\  example  6. 

EXAMPLE  7. 

CONVERSION:  UNITED  STATES  MONEY  INTO  ENGLISH  MONEY: 

To  find  the  equivalent  in  English  money  of  $2,609.23  (United  States 
money)  at  rate  of  exchange,  $4.96£  per  £: 

Operation:  Rate  4.9650  )  2609.2300  (  525.524 
2482.50  20 


126.730       s.  10.480 
99.300  12 


27.4300     d.    5.760 
24.8250 

2.60500  ANSWER — £525.1  Os. 6d 
NOTE. — See  Example  6  show-  2.48250 

ing    conversion    of    same    amount 
English  money  (£525.10s.6d.)  into  122500 

United   States  money,  which  veri-  99300 

fies  correctness  of  figures  in  Ex- 
ample 7.  232000 

198600 

33400 


78  FOREIGN  EXCHANGE  TEXT  BOOK 

EXPLANATION. — Divide  amount  in  dollars  and  cents 
(United  States  money)  by  the  rate  of  exchange  per  pound, 
and  it  gives  the  amounts  in  pounds  and  decimal  of  pound. 
Multiply  the  decimal  (not  the  pounds)  by  20  (20s  =  £1)  and 
it  gives  the  shillings  and  decimal  of  shilling.  Multiply  the 
decimal  (not  the  shillings)  by  12  (12d  =  ls)  and  you  find  the 
pence  and  decimal  of  penny.  If  decimal  of  penny  is  50  or  over 
add  1  to  amount  in  pence,  otherwise  discard  same. 


EXAMPLE  8. 

CONVERSION:  ENGLISH  MONEY  INTO  UNITED  STATES  MONEY  (another  way). 
To  find  the  equivalent  in  United  States  money  of  /226.8s.9d.  at 
"rate  of  exchange,"  $4.86  per  £. 

Operation:          £226  8s  9d 

20s 


4528 
12d 

54345 
4.86  RATE. 


326070 
434760 
217380 

240  )  264116.70  (  1100.486 
240 

241 

240  ANSWER— $1,100.49 


1167 
960 

2070 
1920 


1500 
1440 

XOTE. — The  method  shown  in  Example  6  for  converting  English 
money  into  United  States  money  will  be  found  more  simple  than  that 
employed  in  this  example. 

EXPLANATION.— Multiply  the  pounds  (226)  by  20  (20s  = 
£1)  and  add  thereto  the  amount  in  shillings  (8),  which  gives 
amount  in  shillings.  Multipy  that  product  by  12  (12d  =  ls)  and 
add  thereto  the  amount  in  pence  (9),  which  gives  total  amount 
in  pence.  Multiply  the  pence  (54345)  by  rate  per  pound  ($4.86) 
and  we  find  the  pence  and  decimal.  Divide  that  product  by 
240.  there  being  240  pence  to  the  pound,  and  you  arrive  at 
the  equivalent  in  dollars  and  cents,  United  States  money. 


EXAMPLES  ix  THE  CONVERSION  OF  MONEY  79 

EXAMPLE  9. 

INTEREST  OR  PERCENTAGE,  ENGLISH  MONEY. 

To  find  interest  at  rate  of  4  per  cent  on  £550. 15s.  lid.  for  one  year. 
Or  what  amount  in  English  money  4  per  cent  of  £550. 15s.  lid.  would  be. 

Operation:    £550=  £550. 

15=  .75 

11=  .046 


Decimal  £550.796 

.04% 


22. 03184  (pounds  and  decimal) 
-20s. 


s.  0.63680 
12d. 

d.   7.64160     ANSWER — £22. Os.  8d. 

EXPLANATION. — First,  reduce  pounds,  shillings  and  pence 
to  decimal  as  explained  in  Example  5.  Multiply  the  WHOLE 
decimal  by  rate  per  cent.  (4%),  which  gives  pounds  and  decimal 
of  pound.  Multiply  the  decimal  (not  the  pounds)  by  20  (20s  = 
£1)  and  you  get  the  shillings  and  decimal  of  a  shilling.  Mul- 
tiply the  decimal  of  shilling  (not  the  shillings)  by  12  (12d  =  ls), 
and  it  gives  the  pence  and  decimal  of  penny.  As  the  decimal  of 
penny  exceeds  5  (£d)  add  1  to  pence. 

EXAMPLE   10. 

INTEREST,  ENGLISH  MONEY. 

To  find  the  interest  in  English  money,  on  £50.  12s.  6d.,  for  93  days 
at  rate  6  per  cent,  allowing  365  days  to  the  year. 

Operation:    £50=£50. 

s.  12=        .60 
d.  6=        .025 


Decimal     £50.625 

.06% 


(Days  in  year)          365  )  3.  03750  (  00832 

2920  .00832 

93  days 


1175 

1095  02496 

.07488 
800  


730  £0.77376 
20s. 


s.  15.47520 
12d. 

d.    5.70240 
ANSWER —  £0.   15s.  6d. 

EXPLANATION. — Reduce    pounds,    shillings    and    pence    to 
decimal    as    explained    in    Example    5.     Multiply    the    pounds 


80  FOREIGN'  EXCHANGE  TEXT  BOOK 

and  decimal  by  rate  per  cent  (6%).  Divide  the  product  by  the 
number  of  days  in  year  (365)  and  multiply  the  quotient  by  the 
number  of  days  for  which  interest  is  to  apply  (93).  Multiply 
that  product  by  20  (20s  =  £1)  and  it  gives  the  shillings  and 
decimal.  Multiply  the  decimal  of  shillings  (not  the  shillings) 
by  12  (12d  =  ls)  and  you  find  the  pence  and  decimal  of  penny. 

EXAMPLE   11. 

INTEREST  OR  PER  CENT  ENGLISH  MONEY. 
To  find  4  per  cent,  of  £550.  15s.  lid. 

Operation:    £5.50         •         15s.  lid. 

.  04%  (Rate  per  cent.) 

£22.03  3s.  8d 

20s. 


s.  0.63  (3s.  added) 
12 


d.  7.  64  (8d.  added)  ANSWER—  £22.  Os.  8d. 
EXPLANATION. — Point  off  two  figures  from  the  right  in 
pounds.  Multiply  by  rate  per  cent  (4%).  4  times  lld=44d 
or  3s  8d.  4  times  15s  =  60s,  plus  3s  (carried  from  pence) = 
£3  3s.  4  times  £5.50  plus  £3  =  £22.03.  Multiply  DECIMAL  of 
pounds  .03  by  20s  =  60  plus  3s  =  .63s.  Multiply" 63s  by  12d, 
adding  8d  =  7.64d  or  8d,  thus  giving  answer,  £22  Os  8d. 

EXAMPLE  12. 

IMPORTATIONS,  VALUED  IN  ENGLISH  MONEY. 

To  find  in  United  States  money  value  of  goods  imported,  invoiced  at 
£550.  15s.  lid.,  the  advalorem  duty  upon  which  is  30  per  cent: 
Operation:    £550=£550. 

s.    15=          .75 
d.    11=          .046 


Decimal       £550.796 
Rate  of  Exchange  (par)  4 .  8665     As  used  by  Custom  House. 


2680.45 

.30% 

Cost  in  U.  S.  money  $804.135.    duty, 

without  duty.  $2680 .  4487340 

804.13 

Cost  including  duty   $3484 .  58 — ANSWER 

EXPLANATION. — Reduce  pounds,  shillings  and  pence  to 
decimal  as  explained  in  Example  5.  Multiply  decimal  by  the 
nar  rate  of  exchange  as  fixed  by  Director  of  the  United  States 
fiiiiii.  Multiply  product  by  rate  per  cent  duty  (30%)  and  add 
that  product  to  cost,  not  including  duty. 


EXAMPLES  ix  THE  CONVERSION  OF  MONEY  81 

French,  Belgian  and  Swiss  Money. 
1  Franc=100  Centimes 

The  money  of  account  of  France,  Belgium  and  Switzerland 
is  the  franc  of  100  centimes,  the  actual  value  of  the  gold  unit 
in  the  money  of  the  United  States  being  19.3  cents. 

In  exchange  transactions  between  the  United  States  and 
France,  Belgium  and  Switzerland,  the  rate  of  exchange  as 
usually  quoted  in  large  cities  is  the  variable  number  of  francs 
and  centimes  allowed  per  $1.00,  which  is  expressed,  for  example, 
thus:  Frs.  5.16j,  meaning  that  5  francs  and  16£  centimes  would 
be  allowed  for  each  $1.00  United  States  money.  At  the  smaller 
cities  and  towns  it  is  customary  for  sellers  of  exchange  to  quote 
the  rate  for  a  single  franc,  as  follows:  19.35  cents,  meaning  19 
and  35-100  cents  (United  States  money)  for  each  franc. 
See  "Quotations  for  Foreign  Exchange,"  Chapter  IV. 

EXAMPLE   13. 

CONVERSION:  FRENCH,  BELGIAN  AND  Swiss  MONEY  INTO  UNITED  STATES 
MONEY. 

Find  cost  of  francs  5250.50  at  rate  of  exchange  francs  5. 16J. 
Operation : 

(Rate))    5 .  1625  )  5250 .  5000  (  1017 .  046 
51625 


88000  ANSWER — $1017.05 

51625 


363750 
361375 

237500 
206500 

310000 
309750 


EXPLANATION. — Divide  the  amount   in  francs  by  the  rate 
of  exchange. 

EXAMPLE  14. 

CONVERSION:  UNITED  STATES  MONEY  INTO  FRENCH,  BELGIAN  AND  Swiss 
MONEY. 

To  find   the  amount  in  francs  and  centimes  that  can  be  purchased 
for  $  1 0 1 7 . 05  at  rate  of  exchange,  francs  5 . 1 6  J  per  $1.00. 
Operation:  1017.05 

5.1625 


508525 
203410 
610230 
101705 
508525 

Francs  5,250.520625     ANSWER — Francs    5,250.52 


82  FOREIGN   EXCHANGE  TEXT  BOOK 

EXPLANATION. — Multiply  amount  in  United  States  money 
by  the  rate  of  exchange. 

NOTE. — Example  14  is  reverse  of  Example  13.     The  difference  of  2 
centimes  ( \  cent)  is  caused  by  not  using  exact  fraction  .  046  centimes. 


EXAMPLE   15. 

CONVERSION:  FRENCH,  BELGIUM  AND  Swiss  MONEY  INTO  UNITED  STATES 
MONEY. 

To  find'  cost  of  francs  5250 . 50  in  United  States  money  at  rate  of 
exchange,  francs  516J  minus  1-16  of  1  per  cent,  (expressed  francs 
516J— 1-16). 

Operation:  5. 1625  )  5250.5000  (  1017.046  (U.  S.  money) 
51625 


88000 
51625 
(1-16  of  1%  of  amount) 

$1017.05  363750 

.01  361375 


16)     10.1705  237500 

206500  $1017.05 

.6356or64c.  .64 

310000 
309750  $1016.41— ANSWER 


See  Quotations  for  Foreign  Exchange,  Chapter  IV. 

EXPLANATION. — Divide  amount  in  francs  and  centimes 
(5250.50)  by  rate  of  exchange  without  using  fraction  1-16 
of  1  per  cent,  as  that  applies  only  to  amount  in  United  States 
money..  Find  1-16  of  1  per  cent  of  amount  in  United  States 
money  ($1,017.05),  which  is  64  cents.  Deduct  64  cents  from 
amount  in  United  States  monev  and  vou  have  the  answer. 


EXAMPLE   16. 

CONVERSION:  FRENCH,  BELGIAN  AND  Swiss  MONEY  INTO  UNITED  STATES 
MONEY. 

To  find  cost  of  francs  5250.50  in  United  States  money  at  rate  of 
exchange,  francs  5.16J  plus  1-16  of  1%  (expressed  francs  5. 16J+1-16). 

Operation:  5.1625  )  5250.5000  ($1017.05 
(See  operation  Example  15.) 

1-1 6  of  i  per  cent  of  $101 7. 05=64  cents  (See  Example  15) 
$10 17.  05  pi  us  64  cents      =$1017.69 — ANSWER 

EXPLANATION. — Divide  amount  in  francs  and  centimes  by 
rate  of  exchange,  which  gives  amount  in  United  States  money. 
Find  1-16  of  1  per  cent  of  amount  of  United  States  money 
and  add  same  thereto. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  83 

EXAMPLE   17. 

CONVERSION  OF  UNITED  STATES   MONEY  INTO   FRENCH,   BELGIAN   AND 
Swiss  MONEY. 

To  find  amount  of  francs  and  centimes  that  can  be  purchased  for 
$1017.05  at  rate  of  exchange,  francs  5.16J  minus  1-16  of  1  per  cent 
(expressed  francs  5. 16J-1-16). 

Operation:  5. 1625  x  101 7. 05=francs  5250.52 

(See  Example  14.) 
1-16  of  1%  of  $1017. 05=64  cents 
5.1625 
.64 


206500 
309750 

3.304000  francs 
Francs  5250.  52  plus  francs  3.  30=francs  5,253.  82,  the  answer. 

EXPLANATION. — Multiply  amount  of  United  States  money 
by  rate  of  exchange,  as  in  Example  14,  which  gives  amount 
in  francs  and  centimes.  Find  1-16  of  1  per  cent  of  amount 
of  United  States  money,  as  in  Example  15.  Multiply  that 
product  (64  cents)  by  rate,  which  gives  amount  in  francs  and 
centimes  (F.  3.30)  to  be  added  to  amount  of  francs  and  cen- 
times given  at  the  regular  rate  (frs.  5.16^). 

EXAMPLE   18. 

CONVERSION:    UNITED    STATES    MONEY    ;NTO    FRENCH,    BELGIAN    AND 
Swiss  MONEY. 

To  find  amount  in  francs  and  centimes  that  can  be  purchased  for 
$1017.05  at  rate  of  exchange  francs  5.16J  plus  1-16  (expressed  francs 
5.16H-1-16). 

Operation:  $1017.05 

5.1625   (rate) 


Equals  5,250.52  francs 

(See  Example   14.) 
1-16  of  1%  of  $10 17. 05=64  cents 
(See  Example   15.) 

64  cents  at  rate  of  exchange,  francs  5.16J  will  be  francs  3.30 
which  is  arrived  at  by  multiplying  rate  5.  1625  by  64  cents). 

Deduct  francs  3.30  from  francs  5250.52=francs  5,247.22 — ANSWER 

EXPLANATION. — Multiply  amount  in  United  States  money 
by  rate  of  exchange  (not  including  fraction  1-16  of  1  per 
cent)  to  find  amount  in  francs  and  centimes  at  regular  rate 
which  can  be  purchased  for  $1,017.05.  As  the  fraction  is  plus, 
a  less  number  of  francs  and  centimes  would  be  given,  therefore 
irancs  3.30,  which  are  equivalent  to  64  cents  at  rate  5. 16  j,  should 
be  deducted. 

NOTE. — Always  bear  in  mind  that  where  the  fractional  rates  of  plus 
or  minus  are  used,  it  applies  only  to  the  amount  in  United  States  money; 
therefore,  in  determining  the  amount  of  francs  and  centimes  that  can  be 
allowed  for  a  certain  sum  in  United  States  money,  if  the  fraction  is  minus, 
more  francs  and  centimes  will  be  given;  and  if  plus,  a  less  number. 


84  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE   19. 

CONVERSION:  To  FIND  PRICE  PER  SINGLE  FRANC  WHEN  RATE  QUOTED 
is  PER  $1.00. 

To  find  the  price  of  a  single  franc  when  rate  of  exchange  is  quoted  at 
francs   5.16J. 

Operation:  5.1625)  1.000000  (  .1937 
51625 


483750 
464625 

191250 
154875 

363750 
361375 

ANSWER — .1937  cents  or  19  37-100  cents  per  franc. 

EXPLANATION. — Divide  one  dollar  by  the  rate  per  $1.00. 

NOTE. — For  figuring  large  sums  the  amount  in  cents  should  be 
carried  out  five  or  six  figures,  as  for  example:  .  1937046. 

Always  bear  in  mind  that  the  higher  the  quoted  rate  per  $1.00  for 
French,  Belgian  and  Swiss  exchange  the  lower  the  actual  price.  For 
example:  $5,000  at  rate  francs  5.15  would  give  25,750  francs,  while 
25,750  francs  at  rate  francs  5.20  per  1.00  would  cost  only  $4,951.92. 

CONVERSION,  FRENCH  EXCHANGE:  To  FIND  THE  PRICE  OF  A  SINGLE 
FRANC  WHEN  RATE  is  QUOTED  PER  $1.00  AND  is  SUPPLEMENTED 
BY  A  FRACTIONAL  RATE  OF  PLUS  OR  MINUS,  SUCH  AS  FRANCS  5. 16J- 
1-16. 

EXPLANATION. — First  find  the  price  of  a  single  franc  at 
the  straight  rate  of  5.16|,  as  shown  in  Example  19,  which,  if 
carried  out,  would  have  been  .1937046+,  then  find  1-16  of 
1  per  cent  of  that  rate,  which  in  this  case  would  be  .000121. 
If  fraction  were  minus,  as  quoted  above,  you  would  deduct 
.000121  from  .1937046,  which  would  leave  net  rate  .1935836+, 
THE  ANSWER.  If  fraction  were  plus  1-16  of  1  per  cent  the 
product  .000121  should  be  added  to  rate,  thus  making  net 
rate  per  single  franc  .1938256+.  It  is  unnecessary  to  use  all 
the  figures  of  the  decimal  when  figuring  the  smaller  amounts 
in  francs  and  dollars. 

EXAMPLE  20. 

CONVERSION:  FRENCH,  BELGIAN  AND  Swiss  MONEY  INTO  UNITED  STATES 
MONEY,  WHEN  RATE  OF  EXCHANGE  is  QUOTED  PER  SINGLE  FRANC. 
To  find  cost  of  francs  5250.  50  at  rate  19.  37  cents  per  single  franc. 
Operation:         5250.50 
.1937 

3675350 
1575150 
4725450 
525050 


1017. 021850,  or  $1017.  02— ANSWER. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  85 

EXPLANATION. — Multiply  the  amount  in  francs  and  cen- 
times by  the  rate  per  single  franc. 

NOTE. — See  Example  13.  You  will  note  that  the  same  amount  in 
francs  and  centimes  at  rate  francs  5. 16J  gives  same  result,  or  practically 
so,  for  the  reason  shown  in  Example  19.  In  other  words,  the  rate  francs 
5.  16J  per  $1.00  is  practically  same  as  .1937  cents  per  single  franc,  the 
slight  difference  being  due  to  not  using  the  full  decimal  of  cents. 


EXAMPLE  21. 

CONVERSION:  UNITED  STATES  MONEY  INTO  FRENCH,  BELGIAN  AND  Swiss 
MONEY  WHEN  RATE  OF  EXCHANGE  is  QUOTED  PER  SINGLE  FRANC. 
To  find  the  amount  in  francs  and  centimes  that  can  be  purchased 

for  $1017.02  at  rate  of  exchange — .  1937  cents  per  franc. 

Operation:  1937  )  1017.0200  (  5250.49 
9685 


4852 
3874 


9780 
9685 

9500 

7748 


17520 
17433 

87 
ANSW6R — Francs  5250.49. 

EXPLANATION. — Divide  the  amount  in  dollars  and  cents 
by  the  rate  of  exchange  per  single  franc. 

NOTE. — You  will  observe  that  Example  21  is  proof  of  the  correct- 
ness of  Example  20  of  same  amounts,  the  slight  difference  in  amount 
of  centimes  being  on  account  of  not  using  the  full  fraction. 

ADDITION,  SUBTRACTION,  DIVISION  AND  MULTIPLICATION  OF  FRENCH, 
BELGIAN  AND  Swiss  MONEY  is  DETERMINED  BY  SAME  PROCESS  AS 
WITH  UNITED  STATES  MONEY. 


GERMAN  MONEY. 
1  Mark=100  Pfennigs 

The  monetary  unit  of  Germany  is  the  reichsmark  or 
mark,  of  100  pfennigs,  the  value  of  the  gold  unit  in  the  money 
of  the  United  States,  as  fixed  by  the  Director  of  the  United 
States  mint,  being  23.8  cents. 

In  exchange  transactions  with  Germany  it  is  the  custom 
in  large  cities  to  base  the  rate  of  exchange  upon  the  equiva- 
lent of  4  marks,  expressed  in  cents  thus:  "95£  cents,"  meaning 
that  for  each  4  marks  95£  cents  would  be  charged. 


86  FOREIGN  EXCHANGE  TEXT  BOOK 

In  the  smaller  cities  and  towns,  the  rate  of  exchange 
is  quoted  for  a  single  mark,  thus:  "23.85  cents,"  meaning 
that  for  each  mark,  23  and  85-100  cents  would  be  charged. 
See  "  Quotations  for  Foreign  Exchange,"  Chapter  IV. 


EXAMPLE  22. 
CONVERSION:    MARKS  INTO  DOLLARS  AT  RATE  PER  4  MARKS. 

To  find  the  cost   of   marks  5240.20   at   rate   of   exchange    95   1-16 
cents  per  4  marks. 

Operation:  4)  .950625     (95   1-16) 
.237656=1  Mark 

Marks  5240.20 

at  .  237656     per    1  Mark 


3144120 
2620100 
3144120 
3668140 
1572060 
1048040 

$1245.  36497120  or  $1,245.  36— ANSWER. 

EXPLANATION. — Divide  the  rate  per  4  marks  by  4  to  deter- 
mine the  cost  of  a  single  mark.  Multiply  the  amount  in  marks 
and  pfennigs  by  cost  per  single  mark,«and  the  result  will  be  the 
cost  in  United  States  money. 


EXAMPLE  23. 

To  find  the  cost  of   5000  marks  at  rate  of  exchange,  95 J  cents  per 
4  marks. 

Operation:  5000  Marks 

.9525  Rate  per  4  marks. 


25000 
10000 
25000 
45000 

4  )  47625000 


1190.625— ANSWER  $1190.63 


EXPLANATION.— Multiply   amount    in  marks    by  the    rate 
of  exchange  per  4  marks  and  divide  the  product  by  4  (marks). 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  87 

EXAMPLE  24. 
CONVERSION:  DOLLARS  INTO  MARKS  AT  RATE  PER  4  MARKS. 

To  find  the  amount  in  marks  and  pfennigs  that  can  be  purchased  for 
$1245.  37  at  rate  of  exchange,  95   1-16  per  4  marks. 

Operation:  4  )  .950625    rate  per  4  marks 
.  237656     rate  per  1  mark. 

.237656)  1245.370000  (  5240.22 
1188280 


570900 
475312 

955880          ANSWER,  marks  5240.22. 
950624 


525600 
475312 

502880 
475312 

27568 

EXPLANATION. — Divide  the  rate  by  4  to  determine  rate 
per  single  mark.  Divide  amount  in  dollars  and  Gents  by  rate 
per  single  mark  and  the  result  will  be  amount  in  marks  and 
pfennigs. 


EXAMPLE  25. 
CONVERSION:  DOLLARS  INTO  MARKS  AT  RATE  PER  4  MARKS  (another  way). 

To  find  the  amount  in  marks  and  pfennigs  that  can  be  purchased  for 
$1190.62i  at  rate  of  exchange,  95J  cents  per  4  marks. 

Operation:  .9525  )  1190.6250  (  1250.00 

9525  4  marks 


23812  5000.00  marks — ANSWER 

19050 


47625 
47625 


NOTE. — See  Example  23  for  proof  of  correctness  of  these  figures. 

EXPLANATION. — Divide  amount  in  dollars  and  cents  by 
the  rate  per  4  marks,  and  multiply  the  quotient  by  4,  and  the 
result  will  be  in  marks  and  pfennigs 


88 


FOREIGN  EXCHANGE  TEXT    BOOK 


EXAMPLE  26. 

CONVERSION:   MARKS  INTO   DOLLARS   AT   RATE  PER   4   MARKS,   SUPPLE- 
MENTED WITH  FRACTIONAL  QUOTATIONS. 

To  find  the  cost  of  marks  5240.50  at  rate  of  exchange,  95 J  cents 
per  4  marks,  minus  1-32  of  1%  (expressed  95J — 1-32). 

Operation:  4  )  .9525       rate  per  4  marks 
.  238125  rate  per  1  mark 


1-32  of  1%= 


5240.50  marks 
at    .238125  cents  per  mark 


2620250 
1048100 
524050 
4192400 
1572150 
1048100 


1-32  of  1% 


$1247.89406250 
39 


ANSWER — $1247.50 


1247.89 
.01 

32  )  12 .  4789  (  .  389  or  39  cts. 
96 

287 
256 

318 
288 


EXPLANATION. — Divide  rate  per  4  marks  (without  fraction) 
by  4  to  find  rate  per  single  mark.  Multiply  amount  in  marks 
and  pfennigs  by  rate  per  single  mark  and  the  result  will  be 
amount  in  dollars  and  cents.  Find  1-32  of  1  per  cent  of 
amount  in  dollars  and  cents  and  deduct  same  from  cost  at 
regular  rate. 


NOTE. — If  supplementary  fractional  rate  were  PLUS  1-32  of  1% 
instead  of  MINUS,  its  equivalent  of  39  cents  would  be  added  to  cost  at 
regular  rate. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  89 


EXAMPLE  27. 

CONVERSION:    DOLLARS  INTO   MARKS   AT  RATE  PER   4   MARKS,  SUPPLE- 
MENTED WITH  FRACTIONAL  QUOTATIONS. 

What  amount  in  marks  and  pfennigs  can  be  purchased  for  $1,247.89 
at  rate  of  exchange,  95J  plus  1-32  of  1%  (expressed  95i+l-32.) 

Operation:  4  )  9525  Rate  per  4  marks 

.2381  rate  per  1  mark,  or  .238125,  carried  out 

.238125  )  1247.890000  (  5240.48 
1190625 

572650 
476250 

964000       Marks  5240. 48 

1-32  of  1%  of  952500  1.64 

Marks  5240.  48=  Marks  1.64 

(See  below.)  1150000  5238. 84  Marks 

952500  — ANSWER 

5240.48 

.01  1975000 

1905000 
32)  52.  4048  (  1.637  or  marks  1.64    - 

32  70000 

204 
192 

120 
96 

244 
224 

20 

EXPLAXATIOX. — Divide  the  rate  per  4  marks  (without 
fraction)  by  4  to  determine  rate  per  single  mark.  Divide 
amount  in  dollars  and  cents  by  rate  per  single  mark  and  the 
result  will  be  amount  in  marks  and  pfennigs.  Find  1-32  of 
1  per  cent  of  amount  in  marks  and  pfennigs  deducting 
same  from  amount  in  marks  and  pfennigs  at  regular  rate. 

NOTE. — If  supplementary  fractional  rate  had  been  MINUS  1-32  of  1% 
instead  of  PLUS,  its  equivalent  of  1 . 64  marks  would  have  been  added 
instead  of  deducted. 


90 


FOREIGN  EXCHANGE  TEXT  BOOK 


EXAMPLE  28. 

CONVERSION:   MARKS  INTO   DOLLARS   AT  RATE  PER  4   MARKS,  SUPPLE- 
MENTED WITH  FRACTIONAL  RATE.       (Another  way). 

To  find  the  cost  of  marks  5240.50  at  rate  of  exchange,  95J  cents 
per  4  marks  minus  1-32  of  1%  (expressed  95^ — 1-32). 
Operation:         5240.50      marks 

.  9525      rate  per  4  marks 


2620250 
1048100 
2620250 
4716450 


4)  4991576250 

1247.894 
39 


1-32  of  1%  of  $1247.89=39  cents 
(See  Example  26). 


$1247.50 — ANSWER 

NOTE. — For  verification  of  the  result  see  Example  26. 
EXPLANATION.— Multiply   amount   in   marks   and   pfennigs 
by  the  rate  per  4  marks  and  divide  the  product   by  4,  which 
gives   amount  in  dollars   and   cents   at   regular  rate.     Deduct 
therefrom  1-32  of  1  per  cent  and  the  result  will  be  the  cost. 

NOTE. — If  the  fraction  had  been  PLUS  instead  of  MINUS,  the  39  cents 
would  have  been  added  instead  of  subtracted. 


EXAMPLE  29. 

CONVERSION:   DOLLARS  INTO   MARKS  AT  RATE  PER   4    MARKS,  SUPPLE- 
MENTED BY  FRACTIONAL  RATE.     (Another  method.) 

To  find  the  amount  in  marks  and  pfennigs  that  can  be  purchased  for 
$1247.89  at  rate  of  exchange,  95J  cents  per  4  marks  plus  1-32  of  1% 
(expressed  95J+ 1-32). 

Operation:  .9525)  1247.89000  (  1310.12 
9525  4 


29539 
28575 

9640 
9525 


5240.48  marks 
1.64 


11500 
9525 

19750 
19050 


5238 .  84  marks — ANSWER 


1-32  of  1%  of 
Marks  5240 . 48=  Marks  1.64 

(See  Example  27). 


700 


NOTE. — See  Example  27  for  verification  of  these  figures.) 
EXPLANATION. — Divide    amount    in    dollars    and    cents   by 
rate  per  4  marks  and  multiply  that  result  by  4  to  find  amount 
of  marks  and  pfennigs  at  regular  rate.     Find    1-32    of    1    per 


IN    THE    CONVERSION    OF    MONEY  91 

cent  of  amount  in  marks  and  pfennigs  (5240.48)  and  deduct 
same  from  amount  of  marks  and  pfennigs  at  regular  rate  and 
the  result  will  be  the  net  amount  of  marks  and  pfennigs  that 
can  be  purchased. 

NOTE. — If  the  fraction  had  been  MINUS  1-32  of  1%  instead  of  PLUS 
1-32  of  1%,  the  1 .  64  marks  would  have  been  added  instead  of  subtracted. 


German  Exchange  Quotations,  per  4  Marks. 

To  determine  the  price  of  a  single  mark  when  rate  is  quoted 
per  4  marks,  supplemented  by  fractional  quotations,  plus  or 
minus,  such  as  95| — 1-16:  First  find  the  rate  per  single 
mark  at  the  regular  quotation  (95£)  by  dividing  same  by  4, 
as  in  Examples  22,  24,  26  and  27.  This  would  make  .238125 
cents  per  mark.  1-16  of  1  per  cent  of  .238125  is  .0001488, 
which  if  deducted  from  .238125  gives  .237976+,  the  net  rate 
per  single  mark  at  quotation  of  95^ — 1-16.  If  fraction 
were  plus  1-16,  the  equivalent  of  this  fraction  of  1  per  cent 
would  be  added  to  rate  per  single  mark,  making  same  .2382738 
Where  the  amount  to  be  converted  is  small  it  is  unnecessary 
to  use  all  the  figures  here  used  in  the  decimal  of  a  cent. 

EXAMPLE  30. 
CONVERSION:  MARKS  INTO  DOLLARS  AT  RATE  PER  SINGLE  MARK. 

To  find  the  cost  of  marks  2050.50  at  rate  23.82  cents  per  mark. 

Operation :  2050 .  50  marks 

.  2382  rate  per  1  mark 


410100 
1640400 
615150 
410100 


488 .  429 100  or  $488 . 43 — ANSWER 

EXPLANATION. — Multiply  amount  in  marks  and  pfennigs 
by  rate  per  single  mark. 

EXAMPLE  311 
CONVERSION:   DOLLARS  INTO  MARKS  AT  RATE  PER  SINGLE  MARK. 

What  amount  in   marks  and  pfennigs  will  $488.43  bring  at  rate 
23.82  cents  per  single  mark? 

Operation:  .2382  )  488.4300  (  2050. 50 marks — ANSWER 
4764 


12030 
11910 

12000 
11910 

900 


92  FOREIGN  EXCHANGE  TEXT  BOOK 

EXPLANATION. — Divide   amount   in   dollars   and   cents   by. 
rate  per  single  mark. 

NOTE. — Addition,  multiplication,  subtraction,  interest  or  percentage, 
are  computed  in  German  money  the  same  as  in  United  States  money. 


Scandinavian  Exchange. 
Money  of  Norway,  Sweden  and  Denmark: 

Table. 
1  Krone=100  Ores 

EXAMPLE  32. 
CONVERSION:   KRONORS  INTO  DOLLARS. 

Find  the  cost  of  kronors  200 . 50  at  rate  of  26 . 80  cents  per  kroner. 

Operation :       200 .  50  kronors 

.  2680  rate  per  1  krone 


1604000 
120300 
40100 

53 .  734000  or  $53 .  73 — ANSWER 

EXPLANATION. — Multiply  amount  in  kronors  and  ores  by 
rate  per  single  krone. 


EXAMPLE  33. 
CONVERSION:  DOLLARS  INTO  KRONORS. 

What  amount  in  kronors  and  ores  will  $53.73  buy  at  rate  of  26.80 
cents  per  krone? 

Operation:  .2680  )  53.7300  (  200.485 
5360 

13000 
10720 


22800 
21440 

13600 
13400 

ANSWER — Kronor  200 . 49 

NOTE. — This    example    proves    correctness    of    Example    32.     The 
difference  of  1  ore  is  due  to  fraction  of  cent  not  being  used. 

EXPLANATION. — Divide   amount   in   dollars   and   cents   by 
rate  per  krone. 

NOTE. — Addition,     multiplication,     subtraction     and     interest      or 
percentage,  are"  computed  the  same  as  in  United  States  money. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  93 

Russian  Exchange. 
Money  of  Russia:  1  Ruble=100  Kopecks 

EXAMPLE  34. 
CONVERSION:  RUBLES  INTO  DOLLARS. 

Find  the  cost  of  rubles  500. 10  at  rate  of  51.60  cents  per  ruble. 

Operation :  500.10  rubles 

.5160  rate  per  1  ruble 

3000600 
50010 
250050 


$258.  051600  or  $258. 05— ANSWER 

EXPLANATION. — Multiply   amount   in   rubles   and    kopecks 
by  rate  per  ruble. 

EXAMPLE  35. 
CONVERSION:  DOLLARS  INTO  RUBLES. 

What  amount  in  rubles    and   kopecks    will    $258.05    buy    at    rate 
51.60  per  ruble? 

Operation:  .5160  )  258.0500  (  500.096 
25800 

50000 
46440 

35600 
30960 

ANSWER — rubles  500. 10 

EXPLANATION. — Divide   amount   in   dollars   and    cents   by 
rate  per  single  ruble. 

NOTE. — Addition,     multiplication,     subtraction     and      interest      or 
percentage  are  computed  the  same  as  in  United  States  money 


Austria-Hungarian  Exchange. 
Money  of  Austria -Hungary :     Unit,  1  Krone=100  Hellers 

EXAMPLE  36. 
CONVERSION:  KRONEN  INTO  DOLLARS. 

Find  the  cost  of  kronen  250.25  at  rate  20.40  cents  per  krone. 

Operation :       250 .  25  kronen 

.  2040  rate  per  1  krone 

1001000 
50050 

51 . 051000  or  $51 . 05— ANSWER 

EXPLANATION. — Multiply  amount  in  kronen  and  heller  by 
rate  per  single  krone. 


94  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  37. 
DOLLARS  INTO  KRONEN. 

What  amount  in  kronen  and  heller  will  $51.05  buy  at  rate  20.40 
cents  per  single  krone. 

Operation:  .2040  )  51.0500  (  250.245 
4080 


10250 
10200 

NOTE. — This  example   is  5000 

proof     of     correctness      of  4080 

Example  36. 


9200 
8160 

10400 
10200 

EXPLANATION. — Divide  amount  in  dollars  and  cents  by 
rate  per  single  krone. 

NOTE. — Addition,  multiplication,  subtraction  and  interest  or 
percentage,  are  computed  the  same  as  in  United  States  money. 

Holland  (Netherlands)  Exchange. 
Money  of  Holland:     Unit,  1  Gulden  or  Florin=100  Cents 

EXAMPLE  38. 
CONVERSION:  GULDEN  INTO  DOLLARS. 

Find  the  cost  of  gulden  250.50  at  rate  of  40.35  cents  per  gulden. 
Operation:  250.50 

.4035 


125250 
75150 
100200 

101.076750  or  $101.  08— ANSWER. 

EXPLANATION. — Multiply  amount  in  gulden  and  cents  by 
rate  per  single  gulden  or  florin. 

EXAMPLE  39. 
CONVERSION:  DOLLARS  INTO  GULDEN. 

What  amount  in  gulden  and  cents  will  $101 . 08  buy  at  rate  of  40.  35 
per  gulden? 

Operation:  .4035  )  101.0800  )  250.  50  gulden — ANSWER 
8070 

20380 

NOTE. — This  example   is         20175 
proof      of     correctness     of 


xample  38.  20500 

20175 


3250 

EXPLANATION. — Divide   amount   in   dollars   and   cents   by 
rate  per  single  gulden. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY.  95 

Another  Method  of  Figuring  Holland  Exchange. 

In  the  larger  cities  it  is  the  practice  to  quote  the  rate  for 
Holland  exchange  in  cents  and  fractions  of  a  cent,  thus:  40  3-16 
cents  per  gulden — and  when  such  rates  are  not  considered 
sufficiently  close  to  secure  the  business  they  will  be  supple- 
mented with  fractional  rates  as  in  French  and  German  exchange, 
thus:  40  3-16  minus  1-32  of  1  per  cent,  expressed  40  3-16—1-32. 

EXAMPLE  40. 
CONVERSION,  GULDENS  INTO  DOLLARS. 

Find  cost  of  gulden  5,000.00  at  rate  of  40  3-16 — 1-32. 

Operation :  5000 .  00  gulden 

401875=40  3-16  cents  expressed  decimally 

2500000 
3500000 
4000000 

500000  1-32  of  1  %  of  $2009 . 38=63  cents 

2000000 


$2009.37500000 
63 


$2008.  74 — ANSWER 

EXPLANATION. — Multiply  amount  in  gulden  and  cents  by 
rate  (not  including  plus  or  minus  fraction);  then  find  1-32 
of  1  per  cent  of  amount  in  dollars  and  cents  and  deduct  same 
if  MINUS  or  add  if  PLUS. 


EXAMPLE  41. 
CONVERSION:  DOLLARS  INTO  GULDEN. 

What  amount  in  gulden  and  cents  will  $2,008.75  buy  at  rate  of 
40  3-16—1-32  of  1%? 

Operation:       .401875  )  2008.750000  (  4998. 44 gulden 
1607500  1.56 


40 1 2500  5000 . 00  gulden 

3616875  — ANSWER 


3956250 
3616875 

1-32  of  1%  of  3393750 

5000  gulden=gulden  1 . 56  3215000 


1787500 
1607500 

1800000 
1607500 


192500 
NOTE. — This  example  is  proof  of  correctness  of  Example  40. 


96  FOREIGN  EXCHANGE  TEXT  BOOK 

EXPLANATION. — Divide  the  amount  in  dollars  and  cents  by 
regular  rate  (40  3-16),  not  using  the  fraction  1-32.  Find 
1-32  of  1  per  cent  of  amount  in  gulden  and  cents,  adding 
same  to  total.  Bear  in  mind  that  where  fractions  such  as 
—  1-32  or  +1-32  are  used  and  you  are  converting  dollars 
into  gulden,  the  equivalent  of  the  fraction  in  United  States 
money  converted  into  gulden  must  be  added  if  MINUS  and 
deducted  if  PLUS. 

NOTE. — Addition,   subtraction,   multiplication    and     percentage  are 
computed  in  Dutch  money  as  in  United  States  money. 


Italian  Exchange. 
Money  of  Italy:     Unit,  1  Lira=100  Centesimi 

EXAMPLE  42. 

CONVERSION:  LIRE  INTO  DOLLARS. 

Find  the  cost  of  lire  1050 .  25  at  rate  19 . 40  cents  per  single  lira. 
Operation:         1050.25 
.1940 


4201000 
945225 
105025 

203 .  748500  or  $203 .  75 — ANSWER 

EXPLANATION. — Multiply    amount    in    lire    and    centesimi 
by  rate  per  single  lira. 

EXAMPLE  43. 

CONVERSION:   DOLLARS  INTO  LIRE. 

What  amount  in  lire  and  centesimi  will  $203.  75  buy  at  rate  of  19.  40 
cents  per  lira? 

Operation:  .1940)  203. 7500  (  1050. 25 lire — ANSWER 
1940 


9750 
9700 

5000 
3880 

11200 
9700 

1500 

NOTE. — The  example  here  given  proves  the  correctness  of  Example  42. 
EXPLANATION. — Divide   amount   in   dollars   and   cents   by 
rate  per  single  lira. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  97 

Another  Method  of  Figuring  Italian  Exchange. 

In  the  larger  cities  it  is  the  practice  when  quoting  rates 
for  Italian  exchange  to  quote  the  number  of  lire  and  centesimi 
that  will  be  allowed  per  dollar  as  in  the  case  of  French  exchange, 
thus,  lire  5.17J,  meaning  that  5  lire  17£  centesimi  would  be 
allowed  for  each  $1. 

EXAMPLE  44. 
CONVERSION:   LIRE  INTO  DOLLARS. 

Find  the  cost  of  lire  2500.50  at  rate  of  lire  5. 17 J  per  $1.00. 
Operation:  5.1750)  2500.5000  (  483.188 
207000 


430500 
414000 

ANSWER — $483.19 


165000 
155250 

97500 
51750 


457500 
414000 

435000 
414000 

EXPLANATION. — Divide  amount  in  lire  and  centesimi  by 
the  rate  per  $1. 

NOTE. — Where  supplementary  fractional  rates  are  used,  such  as  plus 
1-32  or  minus  1-32  of  1%,  use  same  method  of  figuring  as  in  French 
exchange  (see  Examples  15,  16,  17  and  18). 

EXAMPLE  45. 
CONVERSION:    DOLLARS  INTO  LIRE. 

What  amount  in  lire  and  centesimi  will  $483.19  buy  at  rate  of  lire 
5.17J  per  $1.00? 

Operation:        $483.19 

5. 1750 lire  per  $1.00 


2415950 
338233 
48319 
241595 

Lire          2500 . 508250     ANSWER— lire  2500 . 50 

NOTE. — This  example  is  proof  of  correctness  of  Example  44. 

EXPLANATION. — Multiply  amount  in  dollars  and  cents  by 
rate  per  $1. 

NOTE. — Where  supplementary  fractional  rates  are  used,  such  as  plus 
1-32  or  minus  1-32  of  1%,  which  is  frequently  the  case,  use  the  same 
method  of  figuring  as  in  French  exchange.  See  Examples  15,  16,  17  and  18. 

NOTE. — Addition,  multiplication,  subtraction  and  percentage  are 
computed  in  Italian  money  as  in  United  States  money. 


98  FOREIGN  EXCHANGE  TEXT  BOOK 

Chinese  and  Hong  Kong  Exchange. 

Money  of  China:     Unit,  1  Dollar=100  Cents 
Money  of  Hong  Kong:     Unit,  1  Dollar =100  Cents 

NOTE. — At  Hong  Kong,  the  dollar  of  100  cents,  local  currency,  is 
the  money  of  account  in  general  use.  At  other  cities  in  China  a  silver 
coin  called  "tael,"  which  varies  in  value  according  to  location,  is  in 
general  use  in  trade  as  a  unit.  This  coin,  however,  is  disregarded  in 
exchange  transactions  between  the  United  States  and  China,  and  in 
drawing  drafts  payable  at  cities  other  than  Hong  Kong  it  is  customary 
to  draw  same  in  dollars  and  cents,  local  currency,  at  exchange  on  Hong 
Kong. 

EXAMPLE  46. 
CONVERSION:  HONG  KONG  DOLLARS  INTO  UNITED  STATES  DOLLARS. 

Find  the  cost  of  500  dollars,  50  cents  Hong  Kong  local  currency,  at 
rate  of  42.10  cents  per  dollar. 

Operation:         500.50 
.4210 


500500 
100100 
200200 

210.710500       ANSWER— $210.71 

EXPLANATION. — Multiply  amount  in  dollars  and  cents, 
Hong  Kong,  local  currency,  by  rate  in  United  States  money 
per  one  dollar. 

EXAMPLE  47. 
CONVERSION:    UNITED  STATES  DOLLARS  INTO  HONG  KONG  DOLLARS. 

What  amount  in  Hong  Kong  dollars  and  cents  will  $210.71  buy  at 
rate  of  42. 10  cents  (United  States  money)  per  dollar? 

Operation:  .4210  )  210.7100  (  500.498 
21050 


21000 
16840 

41600 
37890 

37100 
33680 


ANSWER — 500.  50  Hong  Kong  Dollars 
NOTE. — This  example  is  proof  of  correctness  of  Example  46. 

EXPLANATION. — Divide   amount   in   dollars   and   cents   by 
rate  per  dollar. 

NOTE. — Addition,   subtraction,   multiplication    and    percentage  are 
computed  in  China  and  Hong  Kong  money  as  in  United  States  money. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  99 

Japanese  Exchange. 
Money  of  Japan:     Unit,  1  Yen=100  Sen 

EXAMPLE  48. 
CONVERSION:   YEN  INTO  DOLLARS. 

Find  cost  of  yen  500. 50  at  rate  of  50. 25  cents  per  yen. 
Operation:  500.50 

.5025 


250250 
100100 
250250 

251.501250     ANSWER— $251.50 

EXPLANATION. — Multiply  amount  in  yen  and  sen  by  rate 
per  yen. 

EXAMPLE  49. 
CONVERSION:    DOLLARS  INTO  YEN. 

What  amount  in  yen  and  sen  will  $251.50  buy  at  rate  50.25  cents 
per  yen?       Operation:  .5025  )  251.5000  (  500.497 

25125 


25000 
20100 

ANSWER — Yen  500 . 50 

49000 

45225 


37750 
35175 

NOTE. — This  example  is  proof  of  correctness  of  Example  48. 

EXPLANATION. — Divide  amount  in  dollars  and  cents  by  rate 
per  yen. 

NOTE. — Addition,  subtraction,  multiplication  and  percentage  are 
computed  in  Japanese  money  same  as  in  United  States  money. 

Mexican  Exchange. 
Money  of  Mexico:     Unit,  1  Peso  (or  Dollar)=100  Centavos  (or  Cents) 

EXAMPLE  50. 
CONVERSION:  PESOS  INTO  DOLLARS. 

Find  cost  of  Pesos  450 . 25  at  rate  45 . 50  per  peso  or  dollar. 
Operation:  450.25 

.4550 


2251250 
225125 
180100 


204  863750  or $204. 86 — ANSWER 

EXPLANATION. — Multiply  amount  in  pesos   (Mexican  dol- 
lars) by  rate  per  peso  or  dollar. 


100  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  51. 

CONVERSION:  UNITED  STATES  DOLLARS  INTO  PESOS  OR  MEXICAN  DOLLARS. 

What  amount  in  pesos  and  centavos  (Mexican  dollars  and  cents)  will 
$204 .  86  buy  at  rate  45 . 50  cents  per  peso  or  dollar? 

Operation :     .4550)204.8600(450.241 
18200 


22860  ANSWER— pesos  450.24 

22750 


11000 
9100 

19000 
18200 

8000 

NOTE. — This  example  is  proof  of  correctness  of  example  50;   the  slight 
difference  of  1  centavo  being  due  to  not  using  full  decimal. 

EXPLANATION. — Divide     amount     in     dollars     and     cents 
(United  States  money)  by  rate  per  peso  (or  dollar). 

XOTE. — Addition,    subtraction,    multiplication,    and    percentage    in 
Mexican  money  is  computed  the  same  as  in  United  States  money. 


Philippine  Islands  and  Manila  Exchange. 
Money  of  Philippine  Islands:     Unit,  1  Peso=100  Centavos 

EXAMPLE  52. 
CONVERSION:    PESOS  INTO  DOLLARS. 

Find  the  cost  of  pesos  1500.50  at  rate  of  48.25  cents  per  peso. 

Operation:         1500.50 
.4825 

750250 
300100 
1200400 
600200 

723.991250  or $723.99— ANSWER 

EXPLANATION. — Multiply   amount   in   pesos   and    Centavos 
by  rate  per  single  peso. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  101 

EXAMPLE  53. 
CONVERSION:   DOLLARS  INTO  PESOS. 

What  amount  in  pesos  and  centavos  will  $723.99    buy  at  rate  of 
48.25  cents  per  peso? 

Operation:  .4825  )  723.9900  (  1500.497  or  pesos  1500.50 

4825  —ANSWER 


24149 
24125 


24000 
19300 


47000 
43425 

35750 
33775 

NOTE. — This  example  is  proof  of  correctness  of  Example  52. 

EXPLANATION. — Divide   amount   in   dollars   and   cents   by 
the  rate  per  peso. 

NOTE. — Addition,    subtraction,    multiplication    and    percentage    in 
Philippine  money  is  computed  same  as  in  United  States  money. 


Indian  (British)  Exchange. 

TUT™      nf  T^^JO  .    J  1  Rupee=16  Annas 
Money  of  India;       x  An£&   =12  pieg 


EXAMPLE  54. 

CONVERSION:   RUPEES  INTO  DOLLARS. 

Find  the  cost  of  250  rupees,  12  anna,  10  pies  at  rate  of  33.75  cents 
per  rupee. 

Operation:  Rupees  250=250. 

Annas      12=        .75     (.06J  x  12=.  75  ) 
Pies          10=        .050  (.005  x  10=. 050) 


250.800 
.3375 

1254000 
1755600 
752400 
752400 

84.6450000  or  $84.65 — ANSWER 

EXPLANATION. — To  reduce  annas  and  pies  to  decimal  of 
a  rupee,  multiply  the  annas  by  .0625,  because  1  anna  is  6|- 
100  of  a  rupee.  Multiply  the  pies  by  .005,  because  1  pie  is 


102  FOREIGN  EXCHANGE  TEXT  BOOK 

5-1000  of  a  rupee.  This  latter  fraction  is  not  exact,  but  the  value 
of  the  pie  is  so  little  that  it  is  unnecessary  to  use  a  closer  fraction 
unless  amount  is  very  large,  in  which  case  add  2  if  over  30. 
Multiply  the  rupees  and  decimal  of  rupee  by  the  rate  per  single 
rupee.  Note  the  similarity  to  the  figuring  of  English  exchange. 


EXAMPLE  55. 
CONVERSION:   DOLLARS  INTO  RUPEES. 

What  amount  in  rupees  will  $84. 65  buy  at  rate  33.  75  cents  per  single 
rupee? 

Operation:  .3375  )  84.6500  (  250.8     rupees 
6750  16 


17150  12.8  annas 

16875  12 


27500  9.6  pies 

27000 

—  ANSWER — rupees  250,  annas  12, 
5000  pies  10 

NOTE. — This  example  is  proof  of  correctness  of  Example  54. 

EXPLANATION. — Divide  the  amount  in  dollars  and  cents 
by  the  rate  per  rupee  to  find  amount  in  rupees  and  decimal  of 
same.  Multiply  the  decimal  (not  the  rupees)  by  16,  because 
16  annas  =  1  rupee.  Multiply  the  decimal  (not  the  annas)  by 
12,  because  12  pies  =  l  anna.  Note  the  similarity  to  figuring 
English  exchange. 


Brazilian  Exchange. 
Money  of  Brazil:     Unit,  1  Milreis=1000  Reis 

The  money  of  account  of  Brazil  is  the  milreis,  the  par  value 
of  which  in  the  money  of  the  United  States  is  54.6  cents.  Unlike 
the  decimals  of  units  of  other  South  American  countries,  where 
100  of  the  decimal  equal  one  of  the  unit,  the  milreis  is  divided 
into  1,000  reis. 

In  the  notation  of  accounts  the  milreis  are  separated  from 
the  reis  by  a  sign,  thus  ©  or  $,  the  latter  being  called  "cifras;" 
and  the  thousandths  in  milreis  are  separated  from  the  hun- 
dredths  by  a  colon  (:).  For  example,  six  thousand  five  hundred 
milreis  450  reis,  would  be  expressed  thus:  Rs  6:500$450. 


EXAMPLES  IN  THE  CONVERSION'  OF  MONEY  103 

EXAMPLE  56. 
CONVERSION:    MILREIS  INTO  DOLLARS. 

Find  the  cost  of  6,500  milreis  450  reis  (expressed  Rs.  6:500  $450)  at 
rate  55 . 25  cents  per  milreis. 

Operation :       6500 . 450  milreis 

5525  rate  per  1  milreis 

32502250 
13000900 
32502250 
32502250 


3591.4986250  or  $3591. 50 — ANSWER 

EXPLANATION. — Multiply  the  amount  in  milreis  and  reis 
by  the  rate  for  single  milreis. 


EXAMPLE  57. 

CONVERSION:  DOLLARS  INTO  MILREIS. 

What  amount  in  milreis  and  reis  will  $3591.50  buy  at  rate  of  55.25 
per  milreis? 

Operation :  .     .  5525  )  3591.  5000000  (  6500 . 452 
33150 


27650 
27625 

ANSWER — Rs.  6:500  $452 

25000 

22100 


29000 
27625 


13750 
11050 

NOTE. — This  example  is  proof  of  correctness  of  Example  56,  the 
difference  of  2  reis  being  due  to  not  using  exact  decimal. 

EXPLANATION. — Divide  amount  in  milreis  and  reis  by  the 
rate  per  single  milreis. 


CONVERSION:  BRAZILIAN  EXCHANGE  INTO  ENGLISH  MONEY. 

As  it  is  frequently  the  custom  of  Brazilian  merchants  to 
quote  prices  on  coffee  and  other  commodities  to  American 
buyers  in  English  money  (pence  per  dollar),  the  following 
illustration  will  show  the  method  of  conversion: 


104  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  58. 

MiCREio  INTO  POUNDS,  SHILLINGS  AND  PENCE. 

If  an  invoice  of  coffee  amounted  to  Rs.  6:500  $450  and  rate  of  exchange 
was  quoted  at  22£  pence  per  railreis,  what  wonld  the  bill  amount  to  in 
English  money? 

Operation:    M   6500.450 


3250225 
13000900 
13000900 

12)  146260.125 
20  )  12188.  and4d 


£609  and  8s  ANSWER— £609,  8s.  4d. 

EXPLANATION. — Multiply  the  amount  in  milreis  by  the  rate 
of  exchange  (22£  pence  per  milreis)  which  gives  amount  in 
pence.  Divide  amount  in  pence  by  12  (12d  =  ls)  and  it  gives 
amount  in  shillings  and  pence.  Divide  amount  in  shillings  by 
20  (20s  =  £1)  and  the  result  will  be  amount  in  pounds  and 
shillings. 


EXAMPLE  59. 

If  the  purchaser  of  the  coffee  in  this  country  should  remit  draft  for 
invoice  £609  8s  4d  and  current  rate  of  exchange  was,  say,  $4.86  per 
pound,  the  cost  in  United  States  money  would  be  arrived  at  as  follows: 

Operation:  £609=  £609. 

8s  =  .40 

4d  =  .017 


609.417 
4.86 

3656502 
4875336 
2437668 

2961.76662 

ANSWER— $2961.77 

For  explanation  of  reducing  pounds,  shillings  and  pence  to  decimal 
of  a  pound  see  Example  5. 
(See  Example  60.) 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY.  105 

EXAMPLE  60. 

If  milreis  6:500$450  cost  $2961.77  (United  States  money)  and  it 
was  desired  to  know  the  cost  per  milreis,  the  procedure  would  be  as 
follows: 

Operation:  6500.450)  2961.77000(  .45562+ 
26001800 


36159000 
32502250 

—  ANSWER — .45562  cents 

36567500 

32502250 


40652500 
39002700 


3497100 


EXPLANATION. — Divide   Amount   in   United   States   money 
by  amount  in  Brazilian  money  and  it  gives  the  rate  per  milreis. 


Portuguese  Exchange. 
Money  of  Portugal:     Unit,  1  Milreis=1000  Reis 

The  value  of  the  gold  milreis  in  the  money  of  the  United 
States  is  Si. 08,  while  the  value  of  the  gold  milreis  of  Brazil  is 
only  54.6  cents. 

The  monetary  table  of  Portugal  is  as  follows: 

1  milreis  =2J  crusados=25  reals— 1000  reis 

1    crusado  =10reals=  400  reis 

1  real=     40  reis 

EXAMPLE  61^... 
CONVERSION,  MILREIS  INTO  DOLLARS. 

Find  the  cost  of  600  milreis  500  reis  at  rate  of  $  1 . 08  per  milreis. 

Operation :    600 .  500  milreis 

1 . 08  rate  per  1  milreis 

4804000 
600500 


648 . 54000— ANSWER  $648 . 54 

EXPLANATION. — Multiply    the  amount    in  milreis  and  reis 
by  the  rate  per  milreis. 


106  FOREIGJN  EXCHANGE  TEXT  BOOK 

EXAMPLE  62. 
CONVERSION:  DOLLARS  INTO  MILREIS. 

What  amount  in  milreis  and  reis  will  $648.54  buy  at  rate  Si.  08  per 
milreis? 

Operation:  1.08  )  648.5400  (  600.500 
648 


540 
540 

ANSWER — milreis  600 .  500 

EXPLANATION. — Divide  amount  in  United  States  money 
by  the  rate  per  milreis  and  the  result  will  be  amount  in  milreis 
and  reis. 

Bulgarian  Exchange. 
Money  of  Bulgaria:     Unit,  1  Lew=100  Stotinka 

This  country  has  practically  the  same  system  as  France, 
with  coins  of  like  value,  but  with  different  names. 

The  rate  of  exchange  for  drafts  or  bills  of  exchange  on 
Bulgaria  is  rarely  if  ever  quoted,  it  being  customary  to  draw 
exchange  on  that  country  either  in  French,  German  or  English 
money  at  exchange  on  Paris,  Berlin  or  London. 

The  value  of  the  gold  lew  in  the  money  of  the  United 
States  is  the  same  as  the  franc  of  France,  namely,  19.3  cents. 

Roumanian  Exchange. 
Money  of  Roumania:     Unit,  1  Lei=100  Bani 

This  country  has  practically  the  same  monetary  system 
as  France,  with  coins  of  like  value  but  with  different  names. 
The  exact  value  of  the  gold  unit  (lei)  in  the  money  of  the  United 
States  is  the  same  as  the  franc  of  France — 19.3  cents. 

The  rate  of  exchange  for  drafts  and  bills  of  exchange 
on  Bulgaria  is  sometimes  quoted  by  leading  sellers  of  foreign 
exchange,  and  following  examples  will  illustrate  method  of 
figuring  same: 

EXAMPLE  63. 
CONVERSION:  LEI  INTO  DOLLARS. 

Find  the  cost  of  lei  250. 25  at  rate  of  19. 45  cents  per  lei. 

Operation:         250.25 
.1945 


125125 
100100 
225225 
25025 


48.673625  ANSWER— $48.  67 

EXPLANATION. — Multiply  the  amount  in  lei  and  bani  by 
the  rate  of  exchange  per  lei. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  107 

EXAMPLE  64. 
CONVERSION:  DOLLARS  INTO  LEI. 

What  amount  in  lei  and  bani  can  be  purchased  for  $48.67  at  rate  of 
19.45  cents  per  lei? 

Operation:  .1945)48.6700(250.23 
3890 


9770 

9725  ANSWER— lei  250.23 


4500 
3890 

6100 
5835 

NOTE. — This  example  is  proof  of  Example  63,  the  difference  of  2 
bani  being  due  to  not  using  full  fraction  in  United  States  money. 

EXPLAXATIOX. — Divide  amount  in  United  States  money  by 
the  rate  of  exchange  per  lei. 


Spanish  Exchange. 
Money  of  Spain:     Unit,  1  Peseta= 100  Centimes 

This  country  has  practically  the  same  monetary  system 
as  France,  with  coins  of  like  value  but  of  different  names.  The 
actual  value  of  the  gold  peseta  in  the  money  of  the  United 
States  is  the  same  as  the  franc  of  France,  19.3  cents. 

While  drafts  and  bills  of  exchange  on  Spain  are  more  often 
drawn  in  French,  English  or  German  money,  the  rate  of  exchange 
for  pesetas  is  frequently  quoted  and  the  following  are  the  methods 
of  figuring  same: 

EXAMPLE  65. 
CONVERSION:  PESETAS  INTO  DOLLARS. 

Find  the  cost  of  pesetas  250.25  at  rate-of  19.45  cents  per  peseta. 

Operation :          250 .  25  pesetas 
.1945 


125125 
100100 
225225 
25025 

48.673625  ANSWER— $48.67 

EXPLANATION. — Multiply    the    amount     in    pesetas    and 
centimes  by  the  rate  of  exchange  per  peseta. 


108  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  66. 
CONVERSION:  DOLLARS  INTO  PESETAS. 

What  amount  in  pesetas  and  centimes  will  $48.67  buy  at  rate  of 
19.45  cents  per  peseta.? 

Operation:  .  1945  )  48.670000  (  250. 23 pesetas— ANSWER 
3890 


9770 
9725 

4500 
3890 

6100 
5835 

NOTE. — This  example  is  proof  of  correctness  of  Example  65.  The 
difference  of  2  centimes  is  due  to  full  fraction  in  United  States  money 
not  being  used. 

EXPLANATION. — Divide  the  amount  in  United  States  money 
by  the  rate  of  exchange  per  peseta. 


Servian  Exchange. 
Money  of  Servia:     Unit,  1  Dinar=100  Paras 

This  country  has  practically  the  same  monetary  system 
as  France,  with  coins  of  like  value  of  different  names. 

The  actual  value  of  the  gold  dinar  in  the  money  of  the 
United  States  is  the  same  as  the  franc  of  France,  19.3  cents. 

The  rate  of  exchange  for  drafts  and  bills  of  exchange 
on  Servia  is  rarely,  if  ever,  quoted,  it  being  customary  to  draw 
same  either  in  francs  on  Paris,  pounds  sterling  on  London,  or 
marks  on  Berlin.  The  method  of  figuring  Servian  exchange 
is  the  same  as  for  French  exchange  where  the  rate  quoted  is 
per  single  dinar. 

See  Examples  20  and  21. 


Finnish  Exchange. 
Money  of  Finland:     Unit,  1  Finmark=100  Penni 

The  monetary  system  of  this  country  is  almost  identical 
with  that  of  France,  having  coins  of  like  value,  with  different 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  109 

names.  The  actual  value  of  the  gold  finmark  in  the  money 
of  the  United  States  is  the  same  as  the  franc  of  France,  19.3 
cents. 

In  exchange  transactions  between  the  United  States  and 
Finland  the  rate  of  exchange  for  drafts  and  bills  of  exchange 
is  usually  quoted  at  so  many  cents  and  hundredths  of  a  cent 
per  finmark. 


EXAMPLE  67. 

CONVERSION:  FINMARKS  INTO  DOLLARS. 

Find  the  cost  of  500   finmarks   50  penni  at  rate  of  19.50  cents  per 
finmark. 

Operation :         500 .  50  finmarks 
.1950 


2502500 
450450 
50050 


97.597500  ANSWER— $97.  60 

EXPLANATION. — Multiply    the    amount    in    finmarks    and 
penni  by  the  rate  of  exchange  per  finmark. 


EXAMPLE  68. 

CONVERSION:  DOLLARS  INTO  FINMARKS. 

What  amount  in  finmarks  and  penni  will  $97.60  buy  at  rate  of 
19.50  cents  per  finmark? 

Operation:  .  1950  )  97.600000  (500.51 
9750 


10000 
9750 

2500 
1950 
ANSWER — finmarks  500 .  5 1 

NOTE. — This  example  is  proof  of  correctness  of  Example  67,  the 
difference  of  1  penni  is  due  to  not  using  exact  fraction  in  United  States 
money. 

EXPLANATION. — Divide  amount  in  United  States  money 
by  the  rate  of  exchange  per  finmark. 


110  FOREIGN  EXCHANGE  TEXT  BOOK 

Grecian  Exchange. 
Money  of  Greece:     Unit,  1  Drachma=100  Lepta 

This  country  has  practically  the  same  monetary  system  as 
France,  with  coins  of  like  value,  with  different  names.  The 
actual  value  of  the  gold  drachma  in  the  money  of  the  United 
States  is  the  same  as  the  franc  of  France,  19.3.  The  rate  of 
exchange  for  drafts  and  bills  of  exchange  is  rarely,  if  ever, 
quoted  in  the  money  of  Greece,  it  being  customary  to  draw 
such  exchange  in  pounds  sterling  at  exchange  on  London,  or 
in  francs  at  exchange  on  Paris,  or  in  marks  at  exchange  on 
Berlin,  whichever  is  preferred  by  purchaser.  The  method  of 
figuring  Grecian  exchange  is  the  same  as  for  French  exchange 
where  the  rate  quoted  is  per  single  drachma. 

See  Examples  20  and  21. 


Turkish  Exchange. 

f  1  Turkish  Pound  =100  Piastres 
Money  of  Turkey :  \   1  Piastre  =  40  Paras 

[  1  Para  =     3  Aspes 

The  actual  mint  value  of  the  Turkish  pound  in  the  money 
of  the  United  States  is  $4.396,  which,  as  will  be  noted,  is  con- 
siderably less  than  the  English  pound  sterling,  and  instead  of 
having  the  decimal  of  shillings  and  pence  as  in  the  case  of  the 
English  pound,  is  divided  into  100  piastres,  thus  making  the 
figuring  of  Turkish  money  much  easier  than  English  money. 


EXAMPLE  69. 

CONVERSION:  TURKISH  POUNDS  INTO  DOLLARS. 

Find  the  cost  of  550  pounds  50  piastres  at  rate  of  $4. 50  per  pound. 

Operation :       550 . 50  pounds 

4 .  50  rate  per  pound 


2752500 
220200 

2477.2500    ANSWER— $2,477.  25 

EXPLANATION. — Multiply     the     amount     in     pounds     and 
piastres  by  the  rate  per  pound. 


EXAMPLES  IN  THE  CONVERSION  OF  MONEY  111 

EXAMPLE  70. 
CONVERSION:  DOLLARS  INTO  TURKISH  POUNDS. 

What  amount  in  pounds  and  piastres  will  $2,477.25  buy  at  rate  of 
S4.50  per  pound? 

Operation:  4.50  )  2477.2500  (  550.50 
2250 


2272 
2250 

2250 
2250 


ANSWER — Turkish  pounds  550 .  50 
NOTE. — This  example  is  proof  of  correctness  of  Example  69. 

EXPLANATION.     Divide  the  amount  in  dollars  and   cents 
by  the  rate  per  Turkish  pound. 


South  American  Exchange  (Except  Brazil). 

The  money  of  account  of  Argentine  Republic,  Chile,  Colom- 
bia, Paraguay  and  Uruguay,  is  the  peso  of  100  centavos,  the 
same  as  the  money  of  Mexico.  Owing  to  the  fluctuation  in  the 
value  of  the  peso  of  these  countries,  the  rate  of  exchange  is 
rarely  ever  quoted,  but  instead  drafts  and  bills  of  exchange 
are  usually  drawn  in  United  States  dollars  at  exchange  on 
New  York  City,  or  in  pounds  sterling,  at  exchange  on  London. 

Bolivia's  money  of  account  is  called  the  boliviano,  of  100 
centavos;  Ecuador's  the  sucre,  of  100  centavos;  Peru's  the 
sol,  of  10  dineros,  and  Venezuela's  the  bolivar,  of  20  centavos. 
As  in  the  case  of  other  South  American  countries  exchange  is 
usually  drawn  in  United  States  dollars  or  pounds  sterling. 

The  method  of  figuring  the  money  of  these  countries  is  the 
same  as  for  Mexican  exchange.  See  examples  50  and  51. 


Other  Countries. 

Australia,  New  Zealand,  Tasmania,  Straits  Settlements  and 
Jamaica,  being  English  colonies,  use  the  English  monetary 
system,  the  pound  sterling.  See  Examples  1  to  12,  inclusive. 


112  FOREIGN  EXCHANGE  TEXT  BOOK 

The  Central  American  countries  have  the  same  monetary 
system  as  Mexico,  the  peso  of  100  centavos.  See  Examples 
50  and  51. 

Algeria  uses  the  French  monetary  system.  See  Examples 
13  to  21,  inclusive. 

The  Dutch  East  Indies  countries  use  the  Holland  (Nether- 
lands) monetary  system.  See  Examples  38  to  41,  inclusive. 

The  African  countries  of  Cape  Colony,  Natal,  Orange  Free 
State,  and  South  African  Republic,  or  Transvaal,  all  use  the 
English  system  of  money.  See  Examples  1  to  12,  inclusive. 

Egypt's  monetary  system  is  the  pound  of  100  piastres  as 
in  Turkey,  but  the  English,  French  and  German  systems  are 
generally  used  for  remittances  to  that  country.  For  figuring 
Egyptian  exchange  see  Examples  69  and  70. 


CHAPTER  IV. 

QUOTATIONS  FOR  FOREIGN  EXCHANGE. 


Quotations  for  foreign  exchange,  such  as  drafts,  checks, 
commercial  bills,  etc.,  are  rarely  understood  except  by  those 
familiar  with  the  business. 

In  quoting  the  rate  of  exchange  for  drafts,  checks,  etc., 
on  countries  other  than  Germany,  France  and  sometimes  Italy, 
the  rate  quoted  is  per  single  unit;  that  is,  so  much  per  pound 
sterling  on  England,  per  kronor  on  Norway,  Sweden  and  Den- 
mark, per  ruble  on  Russia,  etc.  Exchange  on  France,  Germany 
and  Italy,  when  quoted  by  dealers  at  the  smaller  places,  would 
be  the  same— so  much  per  single  franc,  mark  or  lira,  but  at  the 
larger  cities  it  is  the  custom  when  quoting  the  rate  for  exchange 
drawn  in  francs  to  quote  the  number  of  francs  and  centimes 
that  will  be  allowed  for  $1.00,  as  for  instance,  5.15f,  meaning 
that  for  each  $1.00  you  will  be  allowed  5  francs,  15f  centimes. 
For  German  exchange  the  quotation  would  be  for  4  marks 
instead  of  one;  for  example,  95  5-16  cents,  meaning  that  for  each 
4  marks  you  would  have  to  pay  95  5-16  cents. 

The  allowance  of  f  of  a  centime  per  $1.00,  considering 
that  one  whole  centime  is  worth  only  about  1-5  of  a  cent  in 
our  money,  and  a  fraction  like  5-16  of  a  cent  on  4  marks, 
may  seem  a  very  small  item,  but  on  a  transaction  of  100,000 
francs  (about  $19,400.00)  f  of  a  centime  |per  $1.00  in  the 
quotation  would  make  a  difference  of  over  $23.00,  and  5-16 
of  a  cent  per  4  marks  in  the  quotation  on  100,000  marks  (about 
$24,000.00)  would  amount  to  a  difference  of  over  $78.00,  or 
over  $15.00  on  each  1-16  of  a  cent. 

One  peculiarity  in  the  French  quotation  is  that  the  rate 
when  quoted  per  $1.00  is  advanced  or  lowered  by  f  of  a 
centime.  For  illustration:  the  next  lower  rate  to  francs  5.15 
would  be  5.15f,  then  5.16^,  5.16|,  5.17J,  etc.,  there  being  just 
f  between  each  quotation.  Bear  in  mind,  the  greater  the 
number  of  francs  and  centimes  allowed  per  dollar  the  lower 
the  rate,  since  as  the  quotation  is  per  $1.00,  the  more  francs 
and  centimes  you  would  receive  for  your  money.  For  example, 
$5,000  at  rate  francs  5.15  would  give  25,750  francs,  while  25,750 
francs  at  rate  francs  5.20  would  only  cost  $4,951.92. 

The  reason  for  this  method  of  quoting  French  exchange, 
which  is  the  reverse  of  that  for  other  kinds  of  exchange,  is  that 

113 


114  FOREIGN  EXCHANGE  TEXT  BOOK 

f  of  a  centime  is  equivalent  to  J-  of  1  per  cent  in  the  pound 
sterling,  and  by  reason  of  most  of  the  French  exchange  being 
formerly  covered  or  paid  through  English  exchange,  this  method 
served  as  a  convenience  in  figuring  and  the  conversion  tables 
formerly  published  were  so  arranged.  Another  reason  assigned 
for  this  method  of  quoting  French  exchange  is  that,  as  there 
are  five  francs  to  the  United  States  dollar,  |  of  1  per  cent 
on  one  franc  would  call  for  f  of  1  per  cent  on  five  francs; 
besides,  until  recent  years,  J  of  1  per  cent  difference  in  quota- 
tion was  regarded  sufficiently  close  for  commercial  purposes. 

Owing  to  the  sharp  competition  among  dealers  in  foreign 
exchange  during  the  past  few  years,  and  which  is  becoming 
keener  all  the  time,  the  difference  of  f  of  a  centime  in  French 
exchange  quotations  is  not  close  enough;  therefore  the  quota- 
tions on  francs,  5.15,  5.15f.  5.16|,  etc.,  are  supplemented  with 
fractional  quotations,  such  as  plus  or  minus  1-64,  1-32,  1-16, 
3-32,  1-8,  etc.,  of  1  per  cent.  For  example,  if  the  quotation 
francs  5.15f  per  $1.00  was  thought  a  little  too  high  to  secure  the 
business,  the  quotation  francs  5.15f — 1-32  would  be  given, 
thus  lowering  the  price  1-32  of  1  per  cent  of  the  gross  amount 
in  dollars  and  cents  represented  in  the  transaction.  This 
supplementary  fractional  quotation  of  minus  1-32,  as  will  be 
seen  in  the  following  illustration,  makes  quite  a  difference  in 
the  price  on  a  large  transaction: 

100,000  francs  at  rate  of  francs  5.15|  per  $1. 00=$19,393.94 
1-32  of  1%  of  $19,393.94  amounts  to  $6.06,  the  saving. 

In  the  use  of  the  plus  and  minus  quotations  it  should 
always  be  remembered  they  do  not  apply  directly  to  the  rate, 
but  mean  1-64,  1-32,  1-16,  etc.,  of  1  per  cent,  plus  or  minus 
the  equivalent  amount  in  United  States  money.  Also  bear 
in  mind  that  where  the  fractional  quotation  plus  or  minus  is 
used,  such  for  example  as  francs  5.15f+l-32  or  5.1  of — 1-32, 
and  the  purchaser  calls  for  an  amount  in  francs  and  centimes 

EQUIVALENT  TO  A  CERTAIN  FIXED  SUM  IN  UNITED  STATES  MONKY, 

then  the  purchaser  will  receive  a  greater  or  less  number  of 
francs,  as  the  case  may  be.  (See  Example  17,  page  83;  Example 
18,  page  83.) 

Quotations  applying  to  French  exchange  also  apply  to 
Belgian,  Swiss  and  Italian  exchange,  when  same  are  quoted 
per  $1.00. 

Quotations  for  exchange  on  Greece,  Servia  and  Bulgaria, 
which  countries  have  monetary  systems  almost  identical  with 
that  of  France,  are  nearly  always  made  in  either  English  or 
French  exchange.  Quotations  for  exchange  on  Roiunania 
are  frequently  made  in  money  of  that  country  (lei)  per  single 
unit,  but  more  often  in  English  or  French  exchange. 

Quotations  for  German  exchange,  when  quoted  for  four 
marks  instead  of  one,  are  also  supplemented  by  the  plus  and 


QUOTATIONS  OF  FOREIGN  EXCHANGE  115 

minus  fractional  quotations  as  in  French  exchange,  as  for 
example:  If  95  5-16  cents  per  4  marks  was  thought  a  little 
too  high,  95  5-16—  (minus)  1-32  (of  1  per  cent.)  would  be 
quoted,  which  on  a  transaction  of  100,000  marks  would  make 
a  difference  to  the  purchaser  of  about  $7.50. 

In  exchange  transactions  between  the  United  States  and 
England  the  quotations  are  sometimes  supplemented  with 
quotations  such  as  plus  $1.00,  which  means  $1.00  additional 
will  be  charged  on  each  1,000  pounds,  making  a  difference  in 
the  rate  of  10  points;  that  is,  if  the  quotation  were,  say,  $4. 87^ 
+$1.00,  it  would  be  practically  the  same  as  $4.8735.  The 
custom  of  using  the  supplementary  quotation  of  plus  $1.00 
is  fast  dying  out  and  instead,  where  transactions  are  of  large 
amounts,  the  rates  are  advanced  or  lowered  by  5-100  of  a 
cent  per  pound,  such  as  $4.87,  $4.8705,  $4.8710,  $4.8715,  etc., 
each  5-100  of  a  cent  making  a  difference  of  $5.00  on  each 
10,000  pounds,  or  $250.00  on  a  transaction  of  500,000  pounds 
(nearly  2£  million  dollars),  not  infrequently  made  by  large 
financial  institutions  in  a  single  day. 

In  a  publication  entitled  "Foreign  Exchange:  Figured, 
Explained,  Simplified,  Illustrated/'  furnishing  conversion  tables 
for  all  classes  of  foreign  exchange  transactions,  the  author 
(H.  'K.  Brooks,  78  Monroe  St.,  Chicago)  has  undertaken  to 
have  adopted  a  method  for  quoting  French  exchange  which 
wrould  do  away  with  the  confusing  fractional  quotations  plus 
or  minus  fractions  of  1  per  cent,  by  supplying  conversion 
tables  for  francs  the  equivalent  of  $1.00  by  eighths  of  a  centime. 
For  example:  Instead  of  jumping  from  francs  5.15  to  francs 
5.15f,  which  would  be  the  next  lower  quotation  under  present 
system,  the  tables  in  his  book  are  for  francs  5.15,  5.15J,  5.15|, 
5.15|,  5.15|  and  then  5.15f,  and  the  same  method  is  used  in 
quoting  the  other  rates  for  French,  Belgian,  Swiss  and  Italian 
exchange.  This  plan  practically  serves  the  same  purpose  as 
the  use  of  the  plus  and  minus  fractions,  avoids  complication 
in  figuring,  and  no  doubt  will  be  generally  adopted  in  the 
near  future. 

The  following  are  samples  of  quotations  for  exchange  on 
the  principal  countries: 

English  Exchange:     $4.87f  per  £,  meaning  $4.87375  per  pound  Sterling. 

French  Exchange:  (large  cities)  francs  5.161  or  francs  5.161 — 1-32, 
meaning  that  5  francs  161  centimes  will  be  allowed  for  each  $1.00 
United  States  money.  Where  the  fraction- -1-32  is  used,  a  deduction 
of  1-32  of  1%  of  the  amount  in  United  States  money  (after  figuring 
at  rate  francs  5. 161)  will  be  allowed. 

French  Exchange:  (small  places)  19.25  cents  per  franc,  which  means 
that  each  franc  will  cost  you  19  and  25  hundredths  cents,  United  Statss 
money. 


116  FOREIGN  EXCHANGE  TEXT  BOOK 

Belgian  and  Swiss  Exchange:     is  quoted  same  as  French  exchange. 

German  Exchange:  (large  cities)  95  3-16  cents  per  4  marks,  meaning 
that  for  each  4  marks  you  would  be  charged  95  and  3-16  cents, 
which  expressed  decimally  would  be  .951875.  If  you  divide  these 
figures  by  four  the  result  will  be  the  price  per  single  mark,  or  .  23796+. 
The  fractions  plus  and  minus  1-16,  1-32,  1-64,  etc.,  are  used  with 
German  exchange  quotations  per  4  marks  as  in  the  case  of  French 
exchange. 

German  Exchange:  (small  places)  23.80  cents  per  mark.  This  means 
that  23  and  80-100  cents,  U.  S.  money,  would  be  charged  for  each 
mark. 

Italian  Exchange:  (large  cities)  lire  5.17£.  This  means  that  for  each 
$1.00  (United  States  money)  5  lire  17i  centesimi  would  be  allowed  or 
paid. 

Italian  Exchange:  (small  places)  19.35  cents  per  lira,  meaning  that  19 
and  35-100  cents  (United  States  money)  would  be  charged  per  lira 
(Italian  money). 

The  following  quotations,  which  cover  the  ordinary  fluctuations, 
are  used  in  French,  Swiss  and  Belgian  exchange,  where  same  is  quoted  per 
$1.00:  francs  5.10,  5.101,  5.11J,  5.1H,  5.12i,  5.13J,  5.13J,  5.14§, 
5.15,  5.151,  5.16i,  5.161,  5.17i,  5. 181,  5.18J,  5.19f,  5.20,  5.201, 
5.21J,  5.2H,  5.22i,  5.231,  5. 233,  5.241,  5.25.  As  explained  on  page 
114,  if  it  is  desired  to  quote  between  these  rates  the  fractions,  either  plus 
or  minus,  1-64,  1-32,  1-16,  1-8,  and  3-32  of  1%  are  used. 

Finnish  Exchange  ]  Are    quoted    at    so    many 


Spanish  Exchange 

Austria-Hungarian  Exchange. 

Norwegian,  Swedish  and  Danish  Exchange. 

Holland  (Dutch)  Exchange. 

Roumanian  Exchange. 

Russian  Exchange. 

Mexican,    Central    and    South    American, 

Hong  Kong  (China)  Manilla  and  Japanese 

Exchange. 


cents  and  fractions  of  a 
cent  in  our  money,  that 
will  be  charged  or  paid 
per  single  unit  of  these 
countries.  For  example, 
Hong  Kong  Exchange 
may  be  quoted  45 . 55 
cents  per  dollar  in  Hong 
Kong  currency. 


Turkish  Exchange:     $4.50  per  Turkish  pound,  meaning  you  would  be 
charged  $4.50  United  States  money  for  each  Turkish  pound. 


Newspaper  Quotations. 

Quotations  on  foreign  exchange,  as  they  appear  in  the 
financial  columns  of  our  leading  daily  newspapers  and  in  weekly 
financial  publications,  ire  seldom  understood  except  by  those 
very  familiar  with  the  business.  Although  almost  every  news- 
paper has  a  different  way  of  quoting  the  rates,  some  more 


QUOTATIONS  OF  FOREIGN  EXCHANGE  117 

complete  than  others,  the  following,  which  is  a  facsimile  of 
clipping  from  a  daily  paper,  is  given  for  illustration  and  explana- 
tion by  reason  of  its  completeness: 


Foreign  Exchange. 

Sterling  was  firm  with  bankers'  60  day 
bills  quoted  at  1-8  of  a  cent,  cheques  5, 
and  cables  10  points  above  Friday's 
close.  Rates  for  actual  business  follow: 

Bankers',  60  days 4.84£  @4.84| 

Bankers',  sight 4.8695@4.87 

Cable  transfers 4.8735@4.8740 

Documents  for  payment4 . 84f  @4.84f 
Ninety  days  on  bankers  4 . 82|  @4 .  82| 
Commercial  sight 4.  8685@4.8690 

Continentals  were  less  active,  virtually 
unchanged.  Bankers'  sight  francs 

closed  at  5.16£@5.16}  plus  1-32; 
marks,  95|  less  1-32  @95f ;  guilders,40f 
less  1-32@40|. 

Following  were  the  posted  rates  of  the 
leading  drawers  of  foreign  exchange: 

Sterling 4.88 

Paris,  francs 5.15 

Berlin,  reichsmarks 95| 

Amsterdam,  florins 40| 

Antwerp,  francs 5 . 15| 

Genoa,  lire 5 . 15| 

Zurich,  francs 5 . 15| 

Vienna,  kronen 20 . 40 

Stockholm,  kronors 26. 90 

St.  Petersburg,  rubles 51 . 70 


"FIRM"  means  a  good  demand  with  prices  tending  upward. 

STEADY  would  mean  a  fair  demand  with  prices  likely  to 
remain  stationary. 

STRONG  would  mean  a  large  demand  with  prices  certain  to 
go  higher. 

DULL  or  WEAK  would  mean  very  little  or  no  demand  with 
prices  tending  lower. 

BANKERS'  60  DAYS:  This  quotation  is  for  bankers'  drafts 
drawn  in  pounds  sterling  upon  (or  payable  by)  a  bank  in  London, 
60  days  after  sight  or  after  acceptance  by  the  paying  bank. 
The  rates  4.84£  to  4.84|  mean  per  pound  sterling. 

BANKERS'  SIGHT:  A  bankers'  draft  for  a  sum  in  pounds 
sterling  upon  a  bank  in  London,  payable  at  sight  or  upon 
demand.  The  rates  $4.8690  to  $4.87  mean  per  pound  sterling. 


118  FOREIGN  EXCHANGE  TEXT  BOOK 

CABLE  TRANSFERS:  Where  the  money  (pounds  sterling) 
is  paid  abroad  (London)  upon  an  order  sent  by  cable.  The 
amount  would  be  paid  in  London  immediately  upon  receipt  of 
cable  instructions,  usually  within  a  few  hours.  (See  Cable 
Transfers,  Chap.  IX.) 

DOCUMENTS  FOR  PAYMENT:  This  refers  to  commercial  bills 
of  exchange  (see  Chap.  IX)  with  documents  (bill  of  lading  and 
insurance  certificate  attached  to  draft),  drawn  against  an 
export  shipment,  the  words  "for  payment"  meaning  that  the 
draft  must  be  paid  before  documents  are  given  up,  thus  insur- 
ing payment  before  delivery  of  goods.  If  "documents"  were 
for  acceptance  the  documents  would  be  delivered  when  draft 
was  accepted  by  person  upon  whom  drawn  (called  "drawee"), 
thus  enabling  drawee  to  obtain  goods  before  payment  of  draft. 
This  quotation  refers  to  drafts  drawn  in  pounds  sterling,  drawn 
payable  60  days  after  sight  (acceptance).  The  rates  quoted 
are  per  pound  sterling. 

NINETY  DAYS  ON  BANKERS:  Means  drafts  drawn  by  either 
banks  or  merchants  (exporters)  in  pounds  sterling  upon  (pay- 
able by)  a  bank,  90  days  after  the  draft  is  accepted  by  bank 
upon  which  drawn. 

COMMERCIAL  SIGHT:  Drafts  drawn  by  merchants 
(exporters)  payable  at  sight  against  balances  in  a  bank  abroad 
which  may  have  accumulated  through  sale  of  merchandise 
exported. 

CONTINENTALS  WERE  LESS  ACTIVE,  VIRTUALLY  UNCHANGED: 
This  refers  to  bills  of  exchange  and  drafts  upon  cities  or  countries 
of  Europe,  other  than  Great  Britain. 

BANKERS'  SIGHT  FRANCS:  This  refers  to  drafts  drawn  by 
bankers  .in  money  of  France  (francs)  payable  by  a  bank,  pre- 
sumably at  Paris.  The  quotation,  5.16^  to  5.16j  plus  1-32  is 
for  francs  per  $1.00,  as  explained  in  this  chapter.  The  quota- 
tions for  marks  are  for  4  marks  on  Germany,  and  those  for 
guilders  are  on  Holland,  per  guilder  or  gulden,  or  florin. 

POSTED  RATES:  The  quotations  given  as  posted  rates 
mean  rates  at  which  leading  sellers  of  exchange  were  selling 
over  their  counter  to  customers,  while  the  preceding  rates  in 
the  above  clipping  refer  to  rates  at  which  bankers  bought  the 
exchange,  or  in  other  words,  "buying  rates." 

STERLING:  This  quotation  is  for  sight  drafts  drawn  in 
*he  money  of  England,  pounds  sterling. 

PARIS,  FRANCS:  Drafts  or  checks  drawn  in  French  francs 
payable  only  at  Paris.  The  rate  is  per  $1.00. 

BERLIN,  REICHSMARKS,  DEMAND:  A  draft  drawn  payable 
at  Berlin,  Germany,  in  marks.  The  rate  is  for  4  marks. 


QUOTATIONS  OF  FOREIGN  EXCHANGE  119 

AMSTERDAM,  FLORINS:  Demand  checks  or  drafts  on 
Amsterdam,  Holland,  drawn  in  money  of  Holland,  florins  or 
guilders  (or  gulden)  (different  nomenclature  of  same  money). 
The  rate  is  per  gulden. 

ANTWERP,  FRANCS:  This  is  a  quotation  for  5  francs  15f 
centimes  per  $1.00  for  demand  drafts  drawn  payable  at  Antwerp, 
Belgium.  This  country  has  the  same  monetary  system  as 
France,  with  coins  of  same  name. 

GENOA,  LIRE:  This  quotation  means  that  for  a  demand 
check  or  draft  on  Genoa,  Italy,  you  would  have  to  pay  at  rate 
of  5  lire  15f  centesimi  per  $1.00. 

ZURICH,  FRANCS:  For  demand  checks  and  drafts  payable 
at  Zurich,  Switzerland,  you  would  be  allowed  5  francs  15f 
centimes  for  each  $1.00. 

VIENNA  KRONEN:  For  demand  checks  or  drafts  on  Vienna, 
Austria.  The  rate  quoted  is  20.40  per  kronen,  the  money  of 
Austria. 

STOCKHOLM,  KRONORS:  For  demand  checks  and  drafts 
on  Stockholm,  Sweden.  The  rate  is  26.90  cents  per  kroner, 
the  money  of  Norway,  Sweden  and  Denmark. 

ST.  PETERSBURG,  RUBLES:  For  demand  checks  and  drafts 
on  St.  Petersburg,  Russia.  The  rate  is  51.70  cents  per  ruble, 
the  monev  of  Russia. 


Other  Newspaper  Quotations. 

Under  the  head  of  "Money  Markets  of  the  World"  we 
frequently  see  quotations  reading  like  this: 

"  Discount  at  London,  2|%;  Paris,  2   7-16%;  Berlin,  3J%." 

Foreign  discount  rates  mean  the  rate  per  cent  charged  or 
allowed  on  drafts  discounted  or  paid  before  due.  They  usually 
apply  to  drafts  drawn  on  bankers. 

Some  newspapers  quote  rates  on  foreign  exchange  in  this 
manner:  "Sterling  exchange,  posted  rates  $4.88;  actual  rates, 
$4.87{.  Documentary  rate's,  $4.84."  Posted  or  nominal 
rates  are  those  charged  the  general  public  for  checks  and  drafts 
and  apply  more  particularly  to  smaller  sums.  Actual  rates  are 
inside  terms  made  to  brokers  or  large  buyers  for  large  sums. 
Documentary  rates  are  for  commercial  bills  of  exchange,  which 
are  drawn  against  commodities  exported.  (See  "Commercial 
Bills  of  Exchange,"  Chap.  TX). 


120  FOREIGN  EXCHANGE  TEXT  BOOK 

We  also  frequently  see  quotations  in  newspapers  reading 
in  this  manner:  "Dated  at  Paris,  Exchange  on  London  frs. 
25.14J  for  checks."  "Dated  at  Berlin,  Exchange  on  London, 
m.  20.865  f°r  checks."  These  quotations  refer  to  the  rates  at 
which  you  can  buy,  in  Paris  and  Berlin,  respectively,  checks 
payable  at  London.  In  this  instance,  you  would  be  allowed 
25  francs  14£  centimes  at  Paris  and  20  marks  36£  pfennigs  at 
Berlin,  per  pound  sterling  for  checks  payable  at  London. 

While  the  quotations  given  by  newspapers  for  exchange 
upon  the  principal  cities,  such  as  New  York,  Chicago,  St.  Louis, 
etc.,  do  not  apply  directly  to  foreign  exchange  transactions, 
the  rates  for  such  exchange  often  materially  affect  the  rates 
for  foreign  exchange.  It  is  usually  quoted  in  this  way:  "New 
York  exchange,  15  cents  discount  before  clearings,  20  cents 
discount  after  clearings,"  or  it  may  be  at  a  premium  instead 
of  a  discount. 

"New  York  exchange"  means  checks  payable  by  a  bank 
in  New  York.  Fifteen  cents  discount  in  this  case  would  mean 
that  New  York  exchange  (checks,  drafts,  etc.)  in  sales  between 
banks  (not  as  a  rule  with  the  public)  a  check  would  be  sold 
at  a  discount  of  15  cents  for  each  $1,000.  If  quoted  at  15 
cents  premium,  they  would  charge  15  cents  additional  per 
$1,000. 

The  reason  the  rates  for  New  York  exchange  affect  the 
rates  for  foreign  exchange  is,  that  the  rates  in  the  West  and 
elsewhere  in  the  United  States  are  based  or  controlled  by  the 
rates  in  New  York,  because  New  York  is  the  principal  buying 
market;  therefore  if  New  York  exchange  in,  say  Chicago,  is  at  a 
discount,  in  large  transactions  banks  would  sell  a  draft  on 
London  or  other  foreign  city  at  a  lower  rate,  depending  upon 
amount  of  discount,  or  if  New  York  exchange  in  Chicago  was 
at  a  premium,  then  they  would  charge  a  higher  rate  for  a  draft 
on  London,  than  it  could  be  bought  for  in  New  York.  The 
cost  of  transferring  the  funds  is  taken  into  consideration. 


CHAPTER  V, 

RATE  OF  EXCHANGE. 

Fixed,  Fluctuating,  Posted,  Actual,  Rising  or  Falling. 

The  term  "rate  of  exchange"  means  the  value  or  price  of 
the  money  of  one  country  reckoned  in  the  money  of  any  other 
country,  the  value  being  a  fixed  rate  of  exchange — the  price  a 
fluctuating  rate  of  exchange. 

The  rate  of  exchange  quoted  between  any  two  countries 
is  for  drafts,  checks  or  bills  of  exchange,  and  the  price  includes, 
besides  the  actual  equivalent  of  the  standard  coin,  some  allow- 
ance for  interest,  according  to  the  tenor  of  the  draft,  and  a  pre- 
mium which  the  seller  demands  for  the  economy  and  superior 
convenience  of  his  draft  or  check,  as  compared  with  a  remittance 
in  currency  or  bullion.  This  premium,  which  represents  the 
fluctuation,  is  more  or  less  according  to  the  amount  of  exchange 
in  the  market  for  sale  and  the  demand  for  same. 

The  rate  of  exchange  when  applied  to  the  buying  or  selling 
of  drafts,  checks,  money  orders,  letters  of  credit,  travelers' 
cheques,  etc.,  means  the  price  in  our  money  that  will  be  charged 
or  paid  per  pound  sterling,  franc,  mark,  kronor,  lira,  or  other 
moneys  of  foreign  countries.  For  example,  a  customer  inquires 
for  the  rate  of  exchange  for  a  check  on  London.  It  is  given 
to  him  as,  say,  $4.88  per  pound.  In  quoting  the  rate  of  exchange 
for  drafts,  checks,  etc.,  on  France  and  Germany,  especially  in 
large  cities,  instead  of  quoting  the  rate  for  a  single  franc  or 
mark,  the  rate  of  exchange  for  French  francs  is  frequently 
quoted  for  the  number  of  francs  and  centimes  that  will  be 
allowed  or  paid  per  SI. 00,  and  in  the  case  of  German  marks  the 
quotation  will  be  for  4  marks  instead  of  1.  (See  Quotations  for 
Foreign  Exchange,  Chap.  IV.) 

A  FIXED  RATE  OF  EXCHANGE  is  one  where  a  fixed  rate  is 
charged  for  a  certain  period  or  indefinitely.  For  illustration: 
The  Government  issues  money  orders,  drawn  in  foreign 
money,  payable  at  a  fixed  rate  of  exchange,  plus  certain  fees. 
The  American  Express  Company  issues  a  form  known  as 
Travelers'  Cheques,  upon  which  is  printed  the  equivalent 
value  in  the  moneys  of  the  various  European  countries,  such 
equivalents  being  based  upon  fixed  rates  of  exchange. 

The  expression  "fluctuating  rate  of  exchange"  is  very  often 

used  because  the  rate  of  exchange  for  drafts,  checks,  bills  of 

121 


122  FOREIGN  EXCHANGE  TEXT  BOOK 

exchange,  etc.,  vary  nearly  every  day,  and,  except  for  small 
sums,  for  which  it  is  customary  to  charge  a  fairly  high  rate,  it 
would  not  be  practical  to  use  fixed  rates. 

In  ESTABLISHING  or  DETERMINING  a  rate  of  exchange, 
whether  "fixed"  or  "fluctuating,"  it  is  arrived  at  as  follows: 
To  the  actual  equivalent  in  our  money  of  pure  gold  or  silver 
contained  in  the  units  of  money  of  the  different  foreign  countries 
is  added,  if  buying,  or  allowed,  if  selling,  interest  from  date  of 
purchase  or  sale  to  date  of  payment  abroad.  To  this  is  added 
the  actual  expense  of  having  such  drafts  or  bills  paid  or  collected 
abroad,  or,  in  other  words,  the  commission  charged  by  foreign 
bankers  for  their  service.  The  cost  of  revenue  stamps  which 
the  various  countries  require  to  be  affixed  to  such  paper  must  be 
taken  into  consideration,  and  finally  the  premium  or  profit  to 
the  seller  of  the  exchange.  (See  Causes  of  Fluctuation  of  Rates 
of  Exchange,  Chap.  VI.) 

POSTED  RATES,  in  foreign  exchange  transactions  are  the 
rates  posted  daily  on  bulletins  of  leading  dealers  in  foreign 
exchange.  They  are,  as  a  rule,  intended  to  apply  to  small 
sums  and  for  letters  of  credit.  It  is  customary  for  bankers 
and  others  issuing  letters  of  credit  (they  are  generally  drawn 
in  pounds  sterling)  to  charge,  in  addition  to  a  fee  (usually  1 
per  cent)  the  POSTED  rate  of  exchange.  ,The  posted  rate  of 
sterling  exchange,  for  example,  is  generally  from  ^  to  H  cents 
per  pound  higher  than  the  actual  rates,  which  latter  are  used 
in  the  sale  of  foreign  demand  checks  for  large  amounts. 

ACTUAL  RATES  OF  EXCHANGE  are  rates  made  each  day  by 
bankers  and  brokers  for  sales  or  purchases  of  large  sums  and 
are  based  upon  the  actual  conditions  of  the  market,  the  supply, 
demand,  etc.,  admitting  of  very  little  profit  over  and  above 
the  actual  cost. 

The  words  "rising"  or  "falling"  when  applied  to  exchange 
rates  between  countries  may  be  favorable  or  unfavorable, 
depending  upon  the  custom  of  quoting  exchange  rate.  For 
example,  in  quoting  the  rate  of  exchange  between  France  and 
England,  it  is  quoted  at  so  many  francs  and  centimes  to  the 
pound  sterling,  and  the  higher  the  quotation  the  more  favorable 
to  England.  The  rates  between  England  and  China,  Japan  and 
South  American  countries  are  quoted  at  so  many  shillings  and 
pence  to  the  dollar,  yen,  peso,  sol,  etc.,  the  units  of  money  of 
the  countries  named,  therefore  the  higher  the  quoted  rate  the 
more  unfavorable  to  England,  since  England  would  have  to 
give  more  shillings  and  pence  to  their  unit. 


CHAPTER  VI, 

CAUSES  OF  FLUCTUATION  IN  RATES  OF 
EXCHANGE. 


The  fluctuation  in  the  price  of  foreign  exchange,  or  as  it 
is  termed,  "the  rate  of  exchange,"  is  due  to  a  number  of  causes. 
If  the  value  of  the  goods  we  exported  greatly  exceeded  the  value 
of  the  goods  we  imported  during  a  certain  period,  the  large 
balance  due  us  from  other  countries  would,  if  there  were  no 
other  international  transactions  to  offset  same,  cause  the  price 
of  exchange  here  to  be  lower,  for  the  reason  that  there  would  be 
less  demand  for  remittances  to  foreign  countries,  since  it  is 
always  the  difference  between  the  debits  and  credits  that  is 
remitted.  On  the  other  hand,  if  we  owed  foreign  countries  a 
much  greater  amount  than  they  owed  us,  exchange  here  would 
be  higher  by  reason  of  increased  demand  for  it. 

It  is  not  alone  our  commercial  trade  that  regulates  the 
price  of  exchange.  The  monetary  conditions  here  and  abroad 
may  entirely  offset  other  conditions. 

When  the  loaning  rate  for  money  here  is  high,  capitalists  and 
bankers  will  loan  their  money  here  instead  of  investing  same 
in  foreign  commercial  bills,  which  causes  less  demand  for  the 
bills,  and  hence  lower  rates.  If  rates  for  money  abroad  are 
high,  there  will  be  a  greater  demand  for  commercial  bills  or 
other  exchange  on  foreign  countries,  for  the  purpose  of  getting 
the  money  to  such  countries  to  take  advantage  of  the  high 
interest  rates,  thereby  causing  higher  rates  here  for  foreign 
exchange.  If  the  rates  for  money  abroad  are  lower  than  here, 
our  capitalists  will  borrow  money  in  their  markets  for  invest- 
ment here,  thus  increasing  our  indebtedness  to  foreign  countries, 
and  when  such  loans  become  due,  there  will  be  an  increased 
demand  for  foreign  exchange  to  pay  same,  resulting  in  higher 
rates. 

The  investments  made  by  capitalists  in  stocks,  bonds  and 
financial  and  commercial  enterprises  in  foreign  countries  mate- 
rially affect  the  rates  for  foreign  exchange  because  it  increases 
or  lessens  the  indebtedness  between  countries,  thus  creating 
demand  for  exchange  to  pay  same. 

The  discount  rates  at  London,  Paris,  Berlin  and  other 
European  centers  very  seriously  affect  the  buying  and  selling 

123 


124  FOREIGN*  EXCHANGE  TEXT  BOOK 

price  of  commercial  bills  drawn  against  commodities  exported 
These  discount  rates  are  the  rates  per  cent  at  which  commercial 
paper  of  the  different  classes  may  be  discounted,  that  is,  the 
allowance  made  for  cashing  or  taking  up  the  paper  before 
maturity,  or  before  due  and  payable,  and  as  the  rates  here  for 
checks,  drafts,  etc.,  on  foreign  countries  are  based  upon  the 
cost  of  placing  credit  abroad  to  meet  payment  of  such  checks, 
drafts,  etc.,  by  means  of  sending  commercial  bills,  it  will  be  seen 
that  the  discount  rates  abroad  affect  the  rates  here.  When  the 
discount  rates  abroad  are  high  the  rate  for  commercial  bills 
here  will  be  lower,  and  when  low  abroad  the  rate  for  commer- 
cial bills  here  will  be  higher.  It  is,  therefore,  always  to  the 
advantage  of  the  exporters  in  this  country  when  discount  rates 
abroad  are  low.  For  illustration:  The  buyers  of  commercial 
bills  in  this  country,  in  order  to  determine  the  rates  which  they 
can  afford  to  pay,  take  into  account  three  things:  first,  the 
rates  at  which  they  can  sell  demand  checks,  drafts,  cables,  etc., 
upon  date  of  purchase  of  the  bills;  second,  the  rates  at  which 
such  bills  can  be  discounted  abroad,  in  order  to  convert  them 
into  money  or  credit;  and  third,  the  cost  of  revenue  stamps 
that  must  be  affixed  to  the  bills  abroad  to  comply  with  internal 
revenue  laws.  A  difference  of  1  per  cent  in  discount  rates, 
say  in  London,  would  make  a  difference  of  1|  cent  per  pound 
in  the  cost  of  discounting  a  90  days  sight  draft  there,  and  neces- 
sarily a  corresponding  difference  in  the  rates  for  sale  here  of 
such  bill  on  London. 

Under  normal  conditions  the  rates  for  foreign  exchange 
fluctuate  between  what  are  termed  gold  exporting  or  gold 
importing  points,  which  means  the  actual  cost  of  the  gold  plus 
the  cost  of  transporting  it  from  one  point  to  another.  For 
example,  if  you  wished  to  remit,  say,  to  London  the  equivalent 
of  £50,000  '(or  approximately  $250,000)  and  you  found  that 
the  cost  of  the  gold  coin  or  bullion  and  the  expense  of  freight, 
insurance,  commission,  etc.,  would  be  considerably  less  than 
the  cost  of  a  draft  or  check  for  the  amount,  payable  at  London, 
then  you  would  ship  gold  in  preference.  If  the  cost  were  equal 
or  greater  for  shipping  the  gold,  then  you  would  remit  the 
check,  as  it-  would  be  more  convenient  and  accompanied  with 
less  risk,  even  at  same  price.  Therefore,  the  rates  naturally 
do  not  go  much  above  or  much  below  the  gold  points. 

When  the  rate  for  demand  sterling  gets  down  to,  say  $4.83f 
to  $4.84  per  pound  sterling,  it  is  generally  cheaper  to  import  gold 
in  large  amounts  than  to  have  remittance  made  from  abroad 
by  check.  If  such  exchange  here  reaches  as  high  as  $4.88^ 
to  $4.88J  per  pound,  then  gold  can  be  exported  equally  as 
cheap  as  for  a  remittance  by  check,  draft,  etc.,  or  a  cable  transfer. 

But  notwithstanding  these  various  conditions  mentioned 
which  affect  the  market  price  of  foreign  exchange  in  this  country, 


CAUSES  OF  FLUCTUATION  IN  RATES  OP  EXCHANGE  125 

it  is  after  all  the  supply  and  demand  that  mainly  regulates  the 
price,  as  in  the  case  of  wheat,  corn,  or  any  other  commodity. 

In  domestic  exchange  there  is  never  any  question  of  parity, 
as  in  the  case  of  foreign  exchange,  and  when  exchange  on  New 
York  City  at  Chicago  is  quoted,  for  example,  at  30  to  40  cents 
per  $1,000  discount,  it  means  that  there  is  a  larger  amount  of 
money  due  from  people  and  banks  in  New  York  to  people  and 
banks  in  Chicago  than  there  is  due  New  York  City  from  people 
and  banks  in  Chicago.  There  is  always  something  on  the 
ledgers  at  both  points  and  the  rate  of  exchange,  discount  or 
premium,  indicates  the  extent  of  the  balance  in  favor  of  either 
of  the  cities. 

In  foreign  exchange  the  parities  of  the  different  gold  coins 
representing  the  unit  of  the  currencies  of  the  various  countries 
have  to  be  considered  as  related  to  our  unit,  the  gold  dollar. 
The  equivalent  of  the  British  gold  sovereign,  or  pound  sterling, 
in  the  gold  money  of  the  United  States,  is,  for  instance,  $4.8665. 
When  the  rate  of  exchange  here  for  demand  drafts  or  bills  of 
exchange  on  London  is  above  $4.8665,  there  is  a  greater  amount 
due  from  this  country  to  London  or  to  Great  Britain  than  is 
owing  to  us,  while  if  the  rate  of  exchange  is  below  $4.8665,  it 
indicates  that  Great  Britain  owes  this  country  a  greater  amount 
than  is  owing  from  this  country  to  Great  Britain.  When  the 
rate  of  exchange  is  so  far  above  or  below  par  ($4.8665)  as  to 
exceed  the  actual  cost  of  moving  the  gold  coin  or  metal,  then 
the  metal  or  coin  is  shipped,  instead  of  remitting  by  draft, 
check  or  cable. 


/U-l 


CHAPTER  VII. 

PARS  OF  EXCHANGE. 


"Par  of  exchange"  means  equal  of  exchange.  There  is  a 
"  mint  par  of  exchange"  and  also  what  we  term  the  "commercial 
par  of  exchange." 

The  mint  par  of  exchange  between  the  United  States  and 
foreign  countries  is  the  actual  value  in  our  money  of  the  pure 
metal  contained  in  the  coins  representing  the  units  of  money 
of  the  various  countries;  or,  to  express  it  differently,  the  equiva- 
lent of  the  unit  of  money  of  one  country  expressed  in  the  currency 
of  another  country  using  the  same  metal  (gold  or  silver)  as  a 
standard  of  value. 

The  Director  of  the  United  States  mint  is  required  at  stated 
periods  to  proclaim  the  value  of  the  coins  or  units  of  the  various 
foreign  countries,  in  our  money,  for  the  purpose  of  computing 
the  worth  of  importations  of  goods  and  also  the  amount  of 
custom  duties  assessable  thereon.  The  value  of  the  gold  coins 
of  countries,  as  fixed  by  the  Director  of  the  mint,  rarely  ever 
changes,  since  the  weight  and  fineness  qf  the  gold  units  of 
countries  are  fixed  by  law — in  the  United  States  by  Act  of 
Congress,  in  Great  Britain  by  act  of  Parliament. 

The  "mint  par  of  exchange"  is  often  called  the  "real 
exchange,"  and  the  commercial  par  of  exchange  is  said  to  be  the 
"nominal  exchange,"  just  as  the  shares  of  a  company  are  said 
to  be  of  the  "nominal"  or  "face  value"  stated  on  the  share 
certificates,  while  the  real  value  would  be  its  actual  worth  in 
open  market  at  moment  of  sale.  Thus  the  "real  exchange"  is 
the  exchange  rate  of  the  day.  The  terms  "fixed"  and  "mov- 
able" exchange  may  also  be  said- to  apply  to  the  mint  and 
commercial  pars  of  exchange,  respectively. 

To  determine  the  actual  mint  par  of  exchange  between 
any  two  countries,  it  is  only  necessary  to  divide  the  weight  of 
the  pure  gold  in  the  gold  unit  of  the  one  country  by  the  weight 
of  the  pure  gold  in  the  coin  of  the  other  country.  The  mint 
par  of  exchange  between  the  United  States  and  countries 
having  silver  monetary  units  is  arrived  at  in  the  same  way, 
but  as  the  price  of  silver  fluctuates,  the  values  of  silver  coins 
frequently  change,  and  their  value  is  based  upon  the  price  of 
silver  for  the  preceding  three  months. 

127 


128  FOREIGN  EXCHANGE  TEXT  BOOK 

The  following  illustrations  give  the  actual  mint  par  of 
exchange  between  the  United  States  and  principal  foreign 
countries  and  the  method  of  figuring  same. 

THE  BRITISH  POUND  STERLING:  The  value  of  the  pound 
sterling,  or  Victoria  sovereign,  in  our  money,  as  fixed  by  Act 
of  Congress,  March  3,  1873,  for  computing  the  value  of  goods 
imported  which  is  expressed  in  English  money,  was  84.8665, 
and  this  value  has  never  since  been  changed. 

THE  BRITISH  SOVEREIGN  weighs  123.274478  troy  grains, 
and  is  11-12  fine;  therefore  the  pure  gold  contained  therein 
weighs  113.0016  troy  grains.  The  gold  dollar  of  the  United 
States  weighs  25.8  troy  grains,  and  is  9-10  fine,  or  23.22 
troy  grains  pure  gold.  To  arrive  at  the  mint  par  of  exchange 
of  the  sovereign  in  our  money,  divide  the  weight  of  the  pure 
gold  in  the  sovereign  (113.0016  troy  grains)  by  the  amount 
of  pure  gold  in  the  dollar  (23.22  troy  grains)  and  the  quotient 
is  $4.866520,  or  as  usually  expressed  and  used  for  commercial 
purposes,  $4.8665. 

THE  FRENCH  FRANC,  which  is  also  the  chief  money  of 
account  in  Belgium,  Switzerland,  Italy  (called  lira),  Greece 
(called  drachma).  Servia  (called  dinar),  Spain  (called  peseta), 
Roumania  (called  lei),  Bulgaria  (called  lew),  and  Finland  (called 
finmark),  weighs  4.978128  troy  grains  and  is  9-10  fine; 
therefore  the  pure  gold  therein  weighs  4.4803152  troy  grains. 
Dividing  the  weight  of  the  pure  gold  in  the  franc  (4.4803152  troy 
grains)  by  the  pure  gold  in  the  United  States  dollar  (23.22  troy 
g/ains)  gives  the  mint  par  of  exchange  of  the  franc  in  our 
money  as  .19295+.  '  The  number  of  francs  and  centimes  con- 
tained in  the  United  States  dollar  is  ascertained  by  dividing 
$1.00  by  .19295,  which  gives  5  francs  18.134+  centimes,  or,  as 
usually  expressed,  francs  5.18£. 

THE  GERMAN  REICHSMARK  OR  MARK,  of  gold,  weighs 
6.1458  troy  grains  and  is  9-10  fine;  therefore  the  pure  gold 
therein  weighs  5.53122  troy  grains,  which  latter  if  divided  by 
the  pure  gold  weight  in  the  United  States  dollar  (23.22  troy 
grains)  gives  the  mint  par  of  exchange,  or  23.8309  cents,  or 
as  proclaimed  by  the  Director  of  the  United  States  mint,  23.8 
cents. 

THE  AUSTRIA-HUNGARY  GOLD  KRONEN,  OR  CROWN,  weighs 
gross  5.2277616  troy  grains,  and  is  9-10  fine,  thus  making 
the  weight  of  the  pure  gold  therein  4.704498544  troy  grains, 
which,  if  divided  by  the  weight  of  the  pure  gold  in  the  United 
States  dollar  (23.22  troy  grains),  gives  20.2626  cents,  or  20.3 
cents  as  the  mint  par  of  exchange  or  actual  value  of  the  gold 
kronen  in  our  money. 

THE  SCANDINAVIAN  (Norway,  Sweden  and  Denmark) 
GOLD  KRONOR  OR  CROWN,  weighs  6.9141  troy  grains  and  is 
9-10  fine,  which  leaves  the  weight  of  the  pure  gold  therein 


OF  EXCHANGE  129 

as  6.22269  troy  grains,  which  if  divided  by  the  weight  of  the 
pure  gold  in  the  United  States  dollar  (23.22  troy  grains)  gives 
26.798  cents,  or  as  stated  by  the  director  of  the  United  States 
mint,  26.8  cents,  as  the  mint  par  of  exchange. 

THE  RUSSIAN  GOLD  RUBLE,  OR  ROUBLE,  weighs  gross, 
13.273894  troy  grains  and  is  9-10ths  fine,  leaving  weight  of 
pure  gold  11.9465046  grains,  which  if  divided  by  the  weight 
of  pure  gold  in  the  United  States  dollar  gives  the  value  of  the 
ruble  in  our  money  51.449  cents,  or  as  declared  by  the  director 
of  the  United  States  mint,  51.5  cents. 

THE  HOLLAND  GULDEN  OR  GUILDER,  OR  FLORIN  (different 
translations  of  same  name),  weighs  gross  10.26682  troy  grains 
and  is  9-10  fine  and,  therefore,  contains  9.333489  troy 
grains  pure  gold.  Dividing  this  weight  by  the  weight  of  pure 
metal  in  the  gold  dollar  (23.22  troy  grains)  gives  40.19  cents, 
or  as  stated  by  the  director  of  the  United  States  mint,  40.2 
cents,  which  is  the  par  of  exchange  between  this  country  and 
Holland. 

THE  PORTUGUESE  GOLD  MILREIS  weighs  27.3965  troy 
grains  and  is  916.637  fine,  leaving  weight  25.088524  troy  grains 
pure  gold,  which  if  divided  by  the  weight  of  the  pure  gold  in 
the  United  States  dollar  gives  $1.0804,  or  $1.08,  as  the  par  of 
exchange  between  the  United  States  and  Portugal. 

THE  BRAZILIAN  GOLD  MILREIS  weighs  gross  13.8374  troy 
grains  and  is  917-thousandths  fine,  thus  making  the  weight 
of  the  pure  gold  therein  12.67642  troy  grains,  which  if  divided 
by  the  weight  of  the  pure  gold  in  the  United  States  dollar  gives 
54.592  cents  or  54.6  cents,  as  given  by  the  director  of  the  United 
States  mint. 

THE  EGYPTIAN  POUND  of  100  piastres  weighs  131.1749  troy 
grains  gross  and  is  875-1000  fine,  and  therefore  contains 
114.778088  troy  grains  pure  gold,  which  if  divided  by  the  weight 
of  the  pure  gold  in  the  United  States  dollar  (23.22)  gives  the 
mint  value  of  $4.943. 

THE  TURKISH  POUND,  OR  MED.TIDIE,  of  100  piastres  weighs 
gross  111.3598  troy  grains  and  is  917-1000  fine,  and  there-' 
fore  contains  102.079887  troy  grains  pure  gold,  which  if  divided 
by  the  weight  of  the  pure  gold  in  the  United  States  gold  dollar 
(23.22)  gives  $4.396  as  given  by  the  director  of  the  United  States 
mint. 

The  mint  par  of  exchange  between  the  United  States 
and  countries  having  gold  units,  other  than  the  countries  above 
named,  are  as  follows: 

Belgium,  the  franc  of  100  centimes  (gold)  19.3  cents. 
Switzerland,  the  franc  of  100  centimes  (gold)  19 .  3  cents. 
Italy,  the  lira  of  100  centesimi  (gold)  19 .  3  cents. 
Greece,  the  drachma  of  100  lepta  (gold)  19.3  cents. 
Spain,  the  peseta  of  100  centimes  (gold)  19.3  cents 
Finland,  the  finmark  of  100  penm,  (gold)  19.  3  cents. 


130 


FOREIGN  EXCHANGE  TEXT  BOOK 


Japan,  the  yen  of  100  sen  (gold)  49 .  8  cents. 

Costa  Rica,  the  colon  of  100  centavos  (gold)  46.  5  cents. 

British  Honduras,  the  dollar  of  100  cents  (gold)  $1 . 00. 

Argentine  Republic,  the  peso  of  100  centavos  (gold)  96.  5  cents. 

Chile,  the  peso  of  100  centavos  (gold)  36 .  5  cents. 

Canada,  the  dollar  of  100  cents  (gold)  $1 .  00. 

Ecuador,  the  sucre  of  100  centavos  (gold)  48 .  7  cents. 

Mexico,  the  peso  of  100  centavos  (gold)  49. 8  cents. 

Peru,  the  libra  (gold)  $4 .  866i. 

Turkey,  the  piaster  of  40  paras  (gold)  4 . 4  cents. 

Uruguay,  the  peso  of  100  centavos  (gold)  $1 . 034. 

Panama,  the  balboa  (gold)  $1 . 00. 

Venezuela,  the  bolivar  of  20  centavos  (gold)  19.3  cents. 

New  Foundland,  the  dollar  of  100  cents  (gold)  $1 . 014. 

Algeria,  the  franc  of  100  centimes  (gold)  19.3  cents. 

Philippine  Islands,  the  peso  of  100  centavos  (gold)  50  cents. 

Liberia,  the  dollar  of  100  cents  (gold)  $1 . 00. 

Hayti,  the  gourde  of  100  cents  (gold)  96 .  5  cents. 

Colombia,  the  dollar  of  100  cents  (gold)  $1 . 00. 

The  mint  par  of  exchange  between  the  United  States  and 
countries  having  silver  monetary  units  fluctuates  according  to 
the  price  of  silver,  but  for  general  information  we  give  below 
the  mint  pars  of  such  countries,  us  declared  by  the  director  of 
the  United  States  mint  on  July  1,  1908,  which  are  valued  by 
their  pure  silver  contents,  at  the  average  price  for  silver  for  the 
three  months  preceding  July  1,  1908. 

JIndia,  the  rupee  of  16  annas  (silver)  32.44^  cents. 
Guatemala,  the  peso  of  100  centavos  (silver)  39.3  cents. 
Honduras,  the  peso  of  100  centavos  (silver)  39.3  cents. 
Nicaragua,   the  peso  of   100  centavos   (silver)   39.3  cents. 
Salvador,  the  peso  of  100  centavos  (silver)  39.3  cents. 
Bolivia,  the  boliviano  of  100  centavos  (silver)  39.3  cents. 
Persia,  the  kran  of  20  shahis  (silver)  7.2  cents. 

Amoy  tael  (silver)  64 . 4  cents. 

Canton  tael  (silver)  64 . 2  cents. 

Chefoo  tael  (silver)  61.6  cents. 

Chin  Kiang  tael     (silver)  62.9  cents. 
Fuchau  tael 
Haikwan  tael 

(Customs) 
Hankow  tael 
Kong  Kong* 
British* 
China-j  Mexican* 

(chopped) 
Nankin  tael 
Niuchwang  tael 
Ningpo  tael 
Peking  tael 
Shanghai  tael 
Swatow  tael 
Takau  tael 
Tientsin  tael 
Kiaochow  tael 


(silver)  59 . 5  cents, 
(silver)  65 . 5  cents. 

(silver)  60.2  cents. 
(silver)  42.3  cents, 
(silver)  42 .  3  cents, 
(silver)  42.7  cents. 


(silver)  63.7  cents. 
(silver)  60.4  cents, 
(silver)  61.9  cents. 
(silver)  62.8  cents, 
(silver)  58  . 8  cents, 
(silver)  59  .  5  cents, 
(silver)  64.8  cents, 
(silver)  62.4  cents, 
(silver)  62.4  cents. 

JThe  sovereign  is  the  standard  coin  of  India,  but  the  rupee  is  the 
money  of  account,  current  at   15  to  the  sovereign. 
*  Dollar. 


PARS  OP  EXCHANGE  131 

PARS    OF    EXCHANGE    BETWEEN    GREAT    BRITAIN    AND 
OTHER   COUNTRIES. 

The  mint  par  of  exchange  between  Great  Britain  and  other 
countries  is  arrived  at  by  comparing  the  quantity  of  pure  gold 
or  silver  in  the  standard  coin  of  the  one  country  with  that  of 
another,  as  in  the  case  between  the  United  States  and  other 
countries. 

The  pure  gold  contained  in  the  British  pound  sterling  or 
sovereign  is  equivalent  to  the  pure  gold  contained  in  25  francs 
22J  centimes  of  France,  therefore  the  par  of  exchange  between 
Great  Britain  and  France  is  said  to  be  francs  25.22J.  The  par 
of  exchange  between  Germany  and  Great  Britain  is  20  marks 
43  pfennigs,  and  between  Great  Britain  and  the  United  States 
•S4.8665,  or  in  other  words  the  pure  ^old  in  the  British  sovereign 
is  equal  to  the  pure  gold  in  20  marks  43  pfennigs,  German 
money,  or  $4.86  and  a  fractio*  t  United  States  money. 

The  par  of  exchange  between  Great  Britain  and  Belgium, 
Greece,  Italy,  Switzerland  and  Spain  is  the  same  as  between 
Great  Britain  and  France,  i.  e.,  the  pure  gold  contained  in 
25  and  22 J- 100  of  the  units  of  these  countries  is  equal  to 
the  pure  gold  contained  in  the  British  pound  sterling,  although 
it  is  customary  in  quoting  the  par  of  exchange  between  Great 
Britain  and  Spain  to  name  the  British  pence  to  the  duro  or 
silver  dollar  of  5  pesetas  of  the  latter  country. 

The  mint  par  of  exchange  between  Great  Britain  and 
Norway,  Sweden  and  Denmark  is  18  kroner  16  ores  to  the 
pound;  with  Holland  12  florins  11  cents  to  the  pound;  with 
Russia,  the  mint  par  is  quoted  at  so  many  rubles  to  10  pounds 
sterling;  with  Austria-Hungary  240  kronen  to  10  pounds 
sterling. 

The  mint  par  of  exchange  between  Great  Britain,  China, 
and  South  American  countries  which  are  still  on  a  silver  monetary 
basis,  fluctuates,  as  is  the  case  between  those  countries  and 
the  United  States,  same  being  governed  by  the  price  of  silver. 

The  gold  bullion,  or  specie  points,  as  explained  elsewhere, 
limit  the  variation  in  rates  of  exchange  above  and  below  par 
during  normal  times.  The  French  exchange  gives  a  good 
illustration  of  this.  As  stated  above  the  mint  par  of  exchange 
between  Great  Britain  and  France  is  25  francs  22£  centimes  to 
the  pound  sterling.  If  the  indebtedness  of  France  to  Great 
Britain  exceeds  that  of  Great  Britain  to  France,  the  demand 
in  Paris  for  drafts  or  bills  on  London  will  be  greater  than  the 
demand  in  London  for  drafts  and  bills  on  Paris,  and  according 
to  the  extent  of  this  indebtedness  and  the  urgency  of  the  case, 
the  French  debtor  will  offer  a  higher  amount  than  the  mint  par 
(francs  25.22£)  until  the  rate  reaches  say  francs  25.33  per  pound, 
or  10J  centimes  per  pound  over  the  mint  par,  which  is  equiva- 
lent to  four  pounds  per  mille  (per  1,000  pounds),  or  sufficient 


132  FOREIGN  EXCHANGE  TEXT  BOOK 

to  pay  the  freight,  insurance,  packing,  etc.,  of  1,000  pounds 
shipment  of  gold  from  Paris  to  London.  Therefore,  rather  than 
pay  a  higher  rate,  the  debtor  in  France  would  transmit  gold  to 
London. 

In  France,  silver  5-franc  pieces  are  legal  tender  same  as 
gold,  and  therefore  possess  a  value  in  home  trade  which  cannot 
be  said  of  the  silver  coins  of  Great  Britain.  On  this  account 
gold  is  at  a  slight  premium  in  France,  and  on  some  occasions 
gold  has  not  been  exported  notwithstanding  the  bullion  points 
named  above  were  reached  and  the  rate  would  continue  rising 
until  it  covered  also  the  premium  on  gold,  before  exports  would 
commence. 

In  the  event  of  Great  Britain  being  indebted  to  France,  the 
competition  for  drafts  and  bills  on  Paris  compels  English  debtors 
to  offer  more  English  money  (or  in  view  of  the  rate  of  exchange 
between  these  countries  being  expressed  in  francs)  to  take  less 
French  money  for  the  pound,  until  the  exchange  rate  drops  to 
say  francs  25. 12^  per  pound,  beL  <v  which  the  rate  is  not  likely  to 
go  because  the  difference  between  that  rate  and  par  amounts  to 
10  centimes  per  pound,  or  4  pounds  per  mille  (per  1,000  pounds) 
which,  as  stated  above,  is  sufficient  to  transport  gold  to  Paris. 

COMMERCIAL  PAR  OF  EXCHANGE. 

In  the  use  of  the  term  "  commercial  par  of  exchange  "  the 
author  is  not  unmindful  of  the  fact  that  the  term  is  not  in  gen- 
eral use,  but  believes  it  is  properly  applied  for  reasons  given. 

The  commercial  par  of  exchange  between  two  countries  or 
two  cities  is  where  the  indebtedness  to  each  other  is  so  nearly 
equal  that  the  demand  for  remittances  to  such  other  countries 
or  cities  is  about  equal  to  the  supply  of  such  exchange  in  the 
market  for  sale.  At  such  times  exchange  would  be  said  to  be  at 
par;  not  mint  par,  but  commercial  par,  and  the  cost  of  remit- 
tance, if  between  two  countries,  would  represent  the  actual  cost 
of  the  coin  or  bullion  plus  the  cost  of  transferring  the  coin  or 
bullion,  involving  freight  charges,  insurance,  interest,  commis- 
sions, etc.,  to  destination. 

If  a  remittance  could  be  made  by  check  or  draft  at  less  cost 
than  by  shipping  the  coin  or  bullion,  then  the  former  would  be 
used;  if,  however,  the  cost  of  a  check  or  draft  exceeded  the 
expense  of  sending  the  coin  or  bullion,  then  the  latter  method 
of  remittance  would  be  resorted  to.  If  the  cost  were  equal, 
.exchange  (draft  or  check)  at  commercial  par  of  exchange,  would 
be  used,  as  it  would  be  more  convenient  and  would  incur  less 
risk. 

If  the  United  States  owed  England  exactly  the  same 
amount  England  owed  the  United  States,  the  debts  between 
these  two  countries  could  be  paid  without  the  intervention  of 


PARS  OF  EXCHANGE  133 

money,  and  the  commercial  price  of  exchange  would  be  at 
par.  If,  however,  this  country  owed  England  a  greater  amount 
than  England  owed  to  this  country,  exchange  here  would  be 
higher,  and  in  England  lower,  and  vice  versa.  In  other  words, 
exchange  in  the  United  States  would  be  at  a  premium  and  in 
England  at  a  discount,  the  premium  in  one  case  being  about 
equal  to  the  discount  in  the  other. 

In  the  United  States  the  term  "par  of  exchange"  or 
"exchange  at  par"  is  frequently  used  to  apply  to  exchange 
transactions  between  towns  or  cities.  If,  for  example,  the 
demand  in  Chicago  for  exchange  (checks,  drafts  or  other  nego- 
tiable paper)  payable,  say,  in  New  York,  was  about  equal  to 
the  supply  of  such  exchange  for  sale,  exchange  would  be  said 
to  be  at  par.  If,  however,  the  demand  was  greater  than  the 
supply,  exchange  on  New  York  would  be  at  a  premium,  the 
amount  of  such  premium  depending  upon  how  great  the  demand 
was  at  the  time.  If  the  supply  of  exchange  for  sale  was  in  excess 
of  the  demand  for  it,  then  exchange  on  New  York  would  be 
said  to  be  at  a  discount. 


CHAPTER  VIII, 

ARBITRATION  OF  EXCHANGE. 

(Arbitrated  Exchange.) 

The  arbitration  of  exchange  is  one  of  the  most  interesting 
operations  in  the  foreign  exchange  system  and  requires  thor- 
ough familiarity  with  the  process  by  those  undertaking  it. 

To  attain  proficiency  in  operations  involving  arbitration 
the  student  must  familiarize  himself  with  the  monetary  systems 
of  the  various  foreign  countries,  must  know  the  methods 
employed  in  quoting  exchange  rates  between  countries,  as  wrell 
as  other  details  which  ordinarily  can  only  be  learned  by  experi- 
ence in  a  well  equipped  foreign  exchange  department. 

Arbitration  of  exchange  is  resorted  to  where  the  transac- 
tion is  between  two  places  in  different  countries  through  the 
medium  of  some  other  place  in  another  country,  or,  to  express 
it  more  clearly,  the  remitting  of  money  to  one  country  through 
another  country,  or  the  buying  of  exchange  of  one  country 
through  another  having  different  monetary  units. 

An  occasion  for  the  arbitration  of  exchange  will  arise  when 
the  rate  of  exchange  here,  direct  upon  the  country  to  which 
you  wish  to  remit,  is  higher  than  between  that  country  and 
what  exchange  will  cost  on  that  country  purchased  in  a 
third  country.  For  illustration:  Through  the  columns  of  our 
daily  papers  or  by  cabled  information  direct  from  abroad,  the 
rate  in  London  for  a  check  on  Paris,  Berlin,  Vienna,  etc.,  or 
vice  versa,  is  furnished.  It  generally  reads  this  way:  "Exchange 
on  Paris,  F.  25.12,"  "Exchange  on  Berlin,  M  20.42,"  etc.  This 
signifies  that  you  could  buy  in  London  a  check  on  Paris  at  the 
rate  of  25  francs  12  centimes  per  pound  sterling,  or,  on  Berlin 
at  the  rate  of  20  marks  and  42  pfennigs  per  pound  sterling; 
therefore,  if  you  had  occasion  to  remit  a  large  sum,  say  to 
Berlin,  and  you  found  you  could  buy  here  a  check  on  London 
and  have  the  amount  remitted  from  London  to  Berlin,  cheaper 
than  to  remit  to  Berlin  direct,  the  transaction  would  be  termed 
"arbitration  of  exchange." 

A  banker  in  Chicago,  having  occasion  to  sell  a  remittance 
to  London,  finds  that  he  can  transfer  his  balance  in  bank  at 
Berlin  to  London  to  meet  payment  of  the  London  check  with 
greater  profit  than  to  use  the  balance  in  the  London  bank  for 
such  purpose.  The  Chicago  banker  therefore  sends  to  his 
London  bank  a  check  on  his  Berlin  account,  which  the  London 
banker  buys  at  the  market  rate  and  credits  the  Chicago  banker 

135 


136  FOREIGN  EXCHANGE  TEXT  BOOK 

with  the  proceeds;  or  instead  of  selling  his  German  check  in 
London  he  may  purchase  a  London  check  in  Berlin,  whichever 
would  be  most  advantageous. 

Such  methods  of  transferring  money  or  credit  from  one 
country  to  another  are  very  common  with  financial  concerns 
and  it  is  usually  done  for  two  reasons,  namely:  First,  if  a  con- 
cern needed  more  money  in  London  than  it  had  there,  and  had 
more  money  in  Berlin  than  it  required,  if  the  transfer  of  the 
money  from  Berlin  to  London  could  be  made  to  advantage  or 
without  loss,  they  would  instruct  their  Berlin  correspondent  or 
bank  to  remit  a  certain  sum  to  London  to  be  placed  to  their 
credit  at  a  certain  bank,  which  would  enable  the  concern  to 
meet  its  obligations  in  London  without  having  to  remit  to  London 
direct  from  here.  Second,  the  transfer  of  money  or  credit 
from  one  country  to  another  is  frequently  made  solely  to  take 
advantage  of  the  profit  that  would  result  in  making  such  trans- 
fer by  reason  of  the  foreign  exchange  market  conditions. 

The  price  of  exchange  between  cities  in  different  countries 
fluctuates  as  it  does  between  cities  in  the  United  States.  For 
example:  Today  exchange  (drafts  or  checks)  may  be  selling 
in  Chicago  payable  in  New  York  (between  banks)  at  a  premium 
of  say  30  cents  per  $1,000.  Tomorrow  it  may  be  selling  at 
par  or  even  at  a  discount.  It  all  depends  upon  the  demand 
for  such  remittances  and  the  supply  of  such  exchange  for  sale. 
The  same  conditions  exist  between  the  various  trade  centers 
in  foreign  countries. 

Our  large  banking  houses  and  financial  concerns  in  this 
country,  keeping  accounts  with  banks  abroad,  are  kept  advised 
daily  by  cable  of  the  rates  of  exchange  between  cities  of  the 
different  foreign  countries  and  whenever  they  see  any  material 
advantage  to  be  gained  by  having  their  funds  or  credit  trans- 
ferred from  one  point  to  another,  they  avail  themselves  of  it. 
In  fact  we  may  say  that  all  leading  American  dealers  in  foreign 
exchange  receive  daily  telegraphic  advices  from  their  corre- 
spondents at  London,  Paris,  Hamburg,  Berlin,  Vienna,  Amster- 
dam and  possibly  other  trade  centers,  covering  the  quotations 
at  which  the  foreign  correspondents  at  each  city  will  buy  or 
sell  for  future  or  prompt  delivery,  checks  on  the  other  cities 
named. 

The  volume  of  transactions  in  French,  German  and  other 
continental  exchange  is  quite  small  when  compared  with  that 
of  English  exchange.  The  reason  for  this  is  that  most  banks 
have  accounts  or  balances  only  at  London,  and  where  balances 
are  kept  in  other  European  cities  they  are  usually  small  as 
compared  with  their  London  account.  Therefore,  in  making 
remittances  to  Paris,  Berlin  or  other  cities  on  the  continent, 
it  is  most  generally  effected  by  transferring  the  funds  to  those 
cities  from  London,  which  can  generally  be  handled  very  satis- 
factorily by  reason  of  most  large  European  banks  having  branches 


ARBITRATION  OF  EXCHANGE  137 

in  London  to  which  the  funds  are  transferred  without  the 
necessity  of  transmitting  same  to  the  continental  cities.  It  is 
customary,  however,  for  banks  before  transferring  funds  from 
their  London  account,  to  carefully  figure  out  the  difference  in 
cost  between  a  remittance  direct  from  here  to  the  city  where  it 
is  desired  to  place  the  funds  and  the  expense  of  transferring 
same  from  London.  This  is  easily  determined  by  ascertaining 
the  rate  of  exchange  between  London  and  the  point  referred  to. 
ILLUSTRATION. — Suppose  a  Chicago  banker  wishes  to  remit 
to  Paris  25,250  francs  and  the  best  rate  at  which  same  could 
be  bought  upon  the  market  wras  francs  5.17J  per  $1.00.  This 
would  call  for  $4.879.23  as  is  shown  by  the  following  compu- 
tation: 25,250  -*•  5.175  =  $4,879.23.  If  a  demand  draft  on 
London  could  be  bought  at  $4.84  per  pound  sterling,  and  the 
cable  reports  from  London  gave  quotations  for  checks  in  London 
on  Paris  at  rate  25.25  francs  per  pound  sterling,  it  will  be  seen 
that  for  1,000  pounds  a  check  for  25,250  francs,  payable  in 
Paris,  could  be  had  in  London,  £nd  that  the  1,000  pounds  check 
on  London  could  be  bought  in  Chicago  at  the  rate  $4.84  per 
pound  or  $4,840.00.  Thus  by  remitting  to  Paris  through  London 
there  would  be  a  saving  of  the  difference  between 

$4879 . 23  cost  of  check  in  Chicago  on  Paris, 
and     4840 . 00  cost  of  check  in  London  on  Paris 


or      $     39.23 

by  having  amount  remitted  from  London  to  Paris  instead  of 
sending  same  from  Chicago  to  Paris. 

ANOTHER  ILLUSTRATION. — A  banker  here  has  call  for  a 
draft  on  Vienna  for,  say,  240,175  kronen.  Not  having  sufficient 
balance  in  bank  at  Vienna  to  cover  payment  of  a  draft  of  this 
sum,  the  banker  cables  the  Vienna  correspondent  bank  asking 
at  what  rate  they  will  purchase  a  check  on  London.  The 
Vienna  bank  offers  240  kronen  \1\  heller  per  each  10  pounds 
sterling. 

In  figuring  this  transaction  the  banker  here  first  determines 
that  his  London  bank  balance  cost  $4.86^  per  pound,  and  that 
he  can  obtain  a  rate  of  20.30  cents  per  kronen  for  drafts  on 
Vienna.  The  banker  here  thereupon  requests  the  Vienna  bank 
to  draw  on  his  London  account  for  £10,000,  for  which  the 
Vienna  bank  credits  him  240,175  kronen,  the  equivalent  of 
£10,000  at  240. 17^  kronen  per  10  pounds.  Now  let  us  see  how 
the  banker  came  out  on  the  transaction: 

240, 1 75  kronen  sold@ 20 .  30  per  kr.=$48 .  755 .  53 
£10,000@4.86iper£=  48.650.00 

Profit  on  transaction,  $     105.53 

At  certain  seasons,  or  during  certain  conditions  of  the 
financial  market  abroad,  it  may  be  found  more  profitable  to 


138  FOREIGN  EXCHANGE  TEXT  BOOK 

transfer  balances  from  one  foreign  center  to  another.  It  may 
also  occur  that  a  bank  may  have  a  customer  for  a  draft  payable 
at  a  point  at  which  it  has  no  balance  or  the  amount  to  its  credit  is 
insufficient  to  meet  payment  of  its  paper  upon  presentation. 
In  such  cases  it  becomes  necessary  for  the  bank,  in  order  to 
meet  payment  of  its  paper,  to  either  cable  the  money  direct  or 
to  transfer  the  amount  from  some  other  city.  In  so  doing  the 
question  of  the  rates  of  exchange  between  the  countries  and 
the  arbitration  arises. 

In  drawing  commercial  bills  of  exchange  against  shipments 
of  goods  exported  to  Spain,  Greece,  Austria-Hungary,  Russia, 
and  we  may  say  to  most  countries  other  than  Great  Britain, 
France,  Germany,  Holland,  Belgium,  Switzerland  and  very 
often  Scandinavian  and  Italian  cities,  it  is  the  general  practice 
of  exporters  to  draw  the  drafts  in  the  money  of  Great  Britain 
(pounds  sterling),  France  (francs)  or  Germany  (marks),  etc., 
rather  than  in  the  money  of  the  country  to  which  the  goods  are 
actually  exported,  and,  in  most  cases,  to  make  drafts  payable 
at  London,  Paris,  or  Berlin  or  other  trade  centers  of  the  coun- 
tries named.  This  is  done  for  the  reason  that  the  exporter  finds 
his  commercial  bill  (drafts)  command  a  higher  price  than  if 
drawn  in  money  of  other  countries,  and  this  is  usually  the 
case,  for  the  reason  that  there  is  a  greater  demand  in  this  country 
for  remittances  to  Great  Britain,  and  other  countries  named. 
On  account  of  this  practice  jobbers  of  foreign  exchange  find  it 
necessary  to  resort  to  arbitration  of  exchange  in  placing  funds 
at  the  principal  centers  to  meet  payment  of  drafts,  money 
orders  and  other  remittances  sold,  and  it  is  also  through  such 
arbitration  that  sellers  arrive  at  the  rate  of  exchange  at  which 
they  can  sell  remittances  to  such  countries.  For  illustration: 
A  banker  here  has  call  for  a  draft  payable  say  at  Prague.  Not 
having  funds  at  Prague  to  meet  payment  of  the  draft,  the 
banker  cables  his  Prague  correspondent  asking  at  what  rate 
they  will  buy  sight  drafts  on  London,  Paris,  Berlin,  etc.,  at 
which  cities  the  banker  has  ample  funds.  The  bank  corre- 
spondent at  Prague  replies  that  they  will  pay  say  240  kronen 
17j  heller  per  10  pound  sterling  for  draft  on  London,  95  kronen 
60  heller  per  100  francs  for  drafts  on  Paris,  and  117  kronen 
40  heller  per  100  marks  for  drafts  on  Berlin.  The  banker  hero 
will  then  determine  which  can  be  sold  to  best  advantage — 
whether  a  draft  on  London,  Paris  or  Berlin — and  then  remit  to 
Prague  a  draft  on  the  point  selected,  or  instructs  his  Prague 
correspondent  to  draw  his  own  draft  on  point  selected  for  his 
account. 


CHAPTER  IX. 

FOREIGN  COMMERCIAL  FORMS. 

Circular  Letter  of  Credit. 

A  Circular  Letter  of  Credit  (See  Exhibits  "A"  and  "G"),  as 
its  name  implies,  is  a  circular  letter  in  printed  or  lithographed 
form  addressed  by  a  bank  (or  financial  institution)  issuing  same, 
to  its  correspondents  in  foreign  countries,  directing  that  they 
honor  the  drafts  of  the  holder,  whose  signature  appears  thereon 
for  identification,  for  such  sums  as  the  holder  may  require, 
not  exceeding,  of  course,  the  amount  for  which  credit  is  drawn. 

These  letters  of  credit  are  designed  to  provide  the  holders 
a  means  of  obtaining  money  wherever  presented  throughout 
the  world,  to  meet  their  expenses  of  travel,  and  at  the  same 
time  to  avoid  the  inconvenience  and  risk  of  carrying  upon  their 
person  a  large  sum  in  currency  or  gold. 

Upon  presentation  of  this  credit  to  a  paying  correspondent, 
a  list  of  which  is  usually  printed  on  the  second  sheet  of  credit, 
or  separately,  and  stating  the  amount  the  holder  wishes  to 
draw,  expressing  same  in  the  kind  of  money  for  which  credit 
is  issued,  that  is,  so  many  pounds,  francs  or  marks,  as  the  case 
may  be,  such  correspondent,  after  referring  to  its  files  to  verify 
the  genuineness  of  the  credit,  signatures  of-  officials  of  bank  or 
concern  issuing  same,  etc.,  with  which  it  has  been  previously 
furnished,  will  fill  out  a  form  of  draft  (See  Exhibit  "C")  for 
amount  asked  for,  and  after  obtaining  the  holder's  signature 
thereto,  will  pay,  in  the  money  of  the  country  where  presented, 
the  equivalent  of  the  amount  asked  for,  and  charge  or  enter 
that  amount  in  space  provided  on  second  page  of  credit.  (See 
Exhibit  "  B.")  The  draft  will  be  drawn  upon  and  be  sent  to 
the  bank  or  bankers  named  on  the  face  of  the  credit.  Such 
draft  will  also  specify  the  number  of  the  credit,  date  of  issue, 
name  of  issuing  bank,  etc. 

When  the  credit  shows  the  holder  to  have  drawn  the  full 
amount  of  same,  it  will  be  taken  up,  attached  to  the  last  draft 
drawn,  and  be  forwarded  to  the  bank  named  on  its  face,  for 
proper  cancellation  and  return  to  issuing  bank. 

Letters  of  credit  wanted  for  use  in  several  countries  are 
usually  issued  in  sterling  money,  for  the  reason  that  exchange 
on  London  is  generally  preferred. 

Notwithstanding  a  letter  of  credit  may  stipulate  the  pur- 
chaser is  entitled  to  receive  a  specified  amount  in  pounds  sterl- 
ing (English  money),  if  presented,  say  in  Germany,  payment 

139 


140  FOREIGN  EXCHANGE  TEXT  BOOK 

would  be  made  in  marks  (German  money);  if  presented  in 
France  payment  would  be  made  in  francs  (French  money),  etc.; 
or  if  in  other  countries  the  holder  would  receive  the  money  of 
the  country  in  which  presented  and  the  amount  paid  would 
represent  the  equivalent  of  the  number  of  pounds  sterling  asked 
for,  at  the  current  rate  of  exchange  of  that  day  upon  London, 
and  such  rate  would  include  a  commission  to  the  paying  corre- 
spondent for  cashing. 

The  issuing  of  letters  of  credit  in  one  kind  of  money  (pounds 
sterling)  to  holders  intending  to  travel  in  countries  other  than 
Great  Britain,  is  usually  unsatisfactory,  since  the  holder  is  seldom 
posted  as  to  the  rate  of  exchange  on  London  or  the  amount  in 
the  money  of  other  countries  they  are  actually  entitled  to. 

If  holders  of  letters  of  credit,  drawn  in  English  money, 
when  using  same  in  other  countries — countries  other  than 
those  using  the  monetary  system  of  Great  Britain — will  take 
the  trouble  to  ascertain  at  one  or  two  banks  the  rate  of  exchange 
for  a  check  upon  London,  it  would  post  them  as  to  the  amount 
they  should  receive  upon  their  letter  of  credit  for  a  given  number 
of  pounds.  For  illustration:  If  you  are  in  Germany  and  the 
rate  quoted  by  a  bank  for  a  check  on  London  was  say  M.  20.42 
(20  marks  42  pfennigs  for  one  pound  sterling),  you  would 
understand  you  should  receive  about  204  marks  20  pfennigs 
for  each  10  pounds  sterling  drawn  upon  your  credit,  less  a 
small  commission  for  bank's  service. 

Banks,  to  issue  their  own  letters  of  credit,  must  have 
funds  to  their  credit  in  a  bank  at  London,  or  whatever  place 
credit  is  drawn  upon.  For  that  reason  only  the  larger  class 
of  banks  or  financial  institutions  undertake  to  issue  their  own 
letters  of  credit.  The  smaller  banks  sell  the  credits  of  others 
and  receive  a  certain  commission  on  sales  of  same. 

Circular  letters  of  credit  are  usually  sold  at  a  slight  advance 
over  the  rate  for  a  demand  check  upon  London  or  city  upon  which 
drawn,  for  the  reason  the  credit  will  not  likely  be  presented 
for  full  payment  for  several  weeks  or  months  and  an  allowance 
has  to  be  made  for  the  possible  fluctuation  in  the  price  of 
exchange.  An  additional  charge  of  about  1  per  cent  is  generally 
made  by  the  selling  bank  for  the  service. 

The  following  are  the  terms  upon  which  letters  of  credit 
are  usually  sold: 

1.  At  the  posted  rate  of  exchange  for  bankers'  checks  on 
London,   plus   1  per  cent  commission,  the  unused    portion,  if 
any,  to  be  bought  back  from  the  holder  of  the  credit  on  its 
return   at   the   current   buying   rate   of  exchange  for  bankers' 
checks  on  London. 

2.  Against  deposit  of  collateral    (bonds,  stocks,  etc.)   for 
an  amount  of  sufficient  value   to   more   than  cover  the  face 
amount  of  credit.     Drafts  drawn  against  credits  issued  on  this 


FOREIGN  COMMERCIAL  FORMS  141 

basis  are  charged  to  a  temporary  bank  account  in  the  name  of 
the  holder  of  the  credit,  at  the  current  selling  rate  of  exchange 
for  London  demand  checks,  plus  1  per  cent  commission  and 
usually  15  days  interest  at  5  per  cent,  adjustment  of  the 
account  to  be  made  upon  surrender  of  the  credit. 

3.  Against  a  satisfactory  guarantee  of  reimbursement  for 
all  drafts  drawn  against  the  credit,  at  current  selling  rate  for 
London  checks,  plus  1  per  cent  commission  and  interest  for 
15  days.  The  latter  .charge  is  intended  to  cover  the  approxi- 
mate time  between  payment  abroad  and  reimbursement. 
(See  Exhibit  "D.") 

It  is  not  unusual  to  issue  circular  letters  of  credit  so  they 
may  be  used  by  two  or  more  persons.  This  is  done  by  entering 
on  the  credit  the  names  of  the  persons  who  may  draw  upon 
same,  and  having  each  sign  their  name  in  space  provided  for 
signature  of  holder  of  credit. 

Purchasers  of  letters  of  credit  are  required  to  sign  a  form, 
of  "agreement"  therefor,  as  per  exhibit  "E,"  which  agreement 
must  also  bear  two  or  more  additional  signatures  of  the  pur- 
chaser. One  of  these  signatures  is  retained  by  bank  issuing 
the  credit,  and  one  is  sent  to  the  foreign  bank  upon  which 
credit  is  drawn.  The  latter  is  accompanied  by  a  form  of  advice 
or  letter  showing  number  of  credit,  date  of  issuance,  amount 
for  which  drawn,  name  of  purchaser  and  date  of  expiration  of 
credit.  When  drafts  drawn  against  credit  are  received  by  the 
foreign  bank  upon  which  credit  is  drawn — as  named  on  face  of 
credit — the  signatures  are  then  compared  with  those  previously 
received,  the  amount  charged  to  issuing  bank's  account  and 
the  draft  is  then  sent  to  the  bank  issuing  credit  for  debit  to 
purchaser's  account. 

As  it  would  be  impracticable  to  furnish  each  paying  cor- 
respondent throughout  the  world  wTith  a  copy  of  the  signature 
of  every  purchaser  of  letters  of  credit,  the  genuineness  of  the 
credits  presented  are  verified  by  comparing  same  with  sample 
previously  furnished  each  correspondent,  by  the  issuing  bank, 
such  sample  containing  facsimiles  of  the  signatures  of  all  officials 
of  issuing  bank  authorized  to  sign  letters  of  credit. 


142  FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "A" 

Reduced  Specimen  Copy  of 

CIRCULAR  LETTER  OF  CREDIT. 


AMERICAN  EXPRESS  COMPANY 


//y^////  //y    //tic/'//   ////////ft:-*'  //  ir/yy/yy  ///  .j //////  f/t 
AMERICAN  EXPRESS  COM PAI&6  LONDON.  /  //// 


AMOUNT    OF__.EA««}  DRAFT     Mu5r  ^NOOHS 


ft  —      /<^  y 
y  -^^^  y 


tR     OF    OHEOI 


AMERICAN  EXPRESS  COMPANY. 


FOREIGN  COMMERCIAL  FORMS 

Exhibit  "B" 

Form  of  Second  Page  of 

CIRCULAR  LETTER  OF  CREDIT. 


143 


THE  AMOUNT  OF  EACH  PAYMENT  MUST  BE  ENTERED 
BELOW,  and  endorsements  be  made  with  care  and  exactness,  for  once  entered, 
they  must  be  allowed  to  remain  without  erasure  or  alteration. 

This  Letter  of  Credit  must  be  canceled  when  exhausted  and  attached  to  the 
final  draft  drawn  hereunder. 


Date  When 
Paid. 


BY  WHOM  PAID. 


NAME  OF 
CITY. 


AMOUNT. 


EXPRESSED  IN  WORDS.          IN  FIGURES. 


144  FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "C" 

Specimen  Copy  of  Form  of  Draft  Drawn  Against 

CIRCULAR  LETTER  OF  CREDIT. 


O 
05 


O 


ID  It) 

o  > 

2:  K 

J  u. 

u 

V*  Q^ 

g  g 

U.  Ct; 

O  O 

h  ID 


^  9 
o   5 


0 


fc 

O 


o: 
a, 

o 
O 


§  $ 

ID 

Q 
hi     > 


3  ^ 

hi    O 


b.  G 

O  *-s 

Q  O 

^  S: 
§•£ 

b)  *>i 

(/)  M^ 


FOREIGN  COMMERCIAL  FORMS  145 

Exhibit  "D" 

Reduced  Specimen  Copy  of 

LETTER  OF  CREDIT  GUARANTY. 


-190- 


Received  from  the  AMERICAN  EXPRESS  COMPANY  its  Letter 

of  Credit  No dated 190 

in  favor  of  Mr — , 

of amounting  to 


Pounds  Sterling(/ ) 

in  consideration  whereof,  we  agree  to  reimburse  the  American  Express 
Company  on  demand,  the  above  amount  or  such  portion  thereof  as  may 
be  drawn  upon  such  Letter  of  Credit,  together  with  exchange,  interest 
and  charges. 

We  further  agree  that  in  case  such  Letter  of  Credit  be  stolen  or 
otherwise  lost,  the  American  Express  Company  in  New  York,  London 
or  Paris  shall  be  immediately  notified  thereof  by  telegraph,  and  we  here- 
by authorize  the  American  Express  Company  to  send  its  usual  circular 
to  its  correspondents  notifying  them  of  the  loss  or  theft  and  also  to 
take  all  such  precautions  as  it  may  deem  advisable  for  the  prevention 
of  fraud,  we  agreeing  to  pay  all  the  expenses  attending  same. 


Signature  of  Purchaser. 


Signdture  of  Guarantor. 


1-46  FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "E» 

Reduced  Specimen  Copy  of 

Purchaser's  Agreement  for  Letter  of  Credit, 


-190- 


Having  been  furnished  with  an  AMERICAN  EXPRESS  COMPANY'S 

Letter  of  Credit  No dated— 190 — — 

or  the  sum  of Pounds  Sterling 

(£ ),  and  to  expire  on — 190 

in  consideration  thereof  I  agree  that  in  case  such  Letter  of  Credit  be 
stolen  or  otherwise  lost,  the  American  Express  Company  in  New  York, 
London  or  Paris  shall  be  immediately  notified  thereof  by  telegraph, 
and  I  hereby  authorize  the  American  Express  Company  to  send  its 
usual  circular  to  its  correspondents,  notifying  them  of  the  loss  or  theft, 
and  also  to  take  all  such  precautions  as  it  may  deem  advisable  for  the 
prevention  of  fraud,  and  I  agree  to  pay  the  expenses  attending  same. 

Signature  of  Purchaser. 
Address 


(1) 


Specimen  signature  of  Purchaser  of  Letter  of  Credit  No.- 

(2) 

Specimen  signature  of  Purchaser  of  Letter  of  Credit  No.- 

(8) 

Specimen  signature  of  Purchaser  of  Letter  of  Credit  No.- 


FOREIGN  COMMERCIAL  FORMS  147 


Letter  of  Indication. 

A  letter  of  indication  is  sometimes  used  in  connection  with 
circular  letters  of  credit.  Such  letter  is  simply  a  letter  of 
introduction  of  the  holder  to  the  foreign  paying  correspondents, 
bearing  the  signature  of  the  holder  for  identification.  This 
letter  (see  Exhibit  "F")  in  substance  states  that  a  certain  circular 
letter  of  credit,  giving  the  number,  date,  etc.  (not  the  amount) 
has  been  issued  to  such  a  person  (naming  holder)  and  requests 
that  same  be  duly  honored. 

Where  such  letters  are  used  the  purchaser's  name  will  not 
appear  upon  the  circular  letter  of  credit,  so  in  case  the  latter  is 
lost,  or,  for  that  matter,  the  letter  of  indication,  it  would  be 
of  no  use  to  the  finder,  for  a  bank  abroad  would  not  pay  either 
unless  both  were  presented  together.  Purchasers  are  requested 
to  carry  the  letter  of  credit  separately  from  the  letter  of  indi- 
cation to  avoid  both  being  lost  together.  This  letter  of  indica- 
tion is  used  simply  to  diminish  the  risk  attending  the  issuing 
of  circular  letters  of  credit  in  the  case  of  their  loss.  (See 
Exhibit  "  G,"  showing  circular  letter  of  credit  having  letter  of 
indication  feature.) 


148 


FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "F" 

Specimen  Copy  of  Form  of 

LETTER  OF  INDICATION. 


COMMERCIAL  NATIONAL  BANK 

OF   CHICAGO 

Chicago,  U.S.A., 

To  our  Correspondents  as  listed  herein  : 

This  serves  to  introduce  to  you 

M , 

the  bearer  of  our  Circular  Letter  of  Credit 

No dated , 

a  specimen  of  whose  signature  is  at  the  foot 
hereof. 

COMMERCIAL  NATIONAL  BANK 
OF  CHICAGO 

SIGNATURE: 

LIST  No 


This  Letter  of    Indication   generally  appears  on  the  first  page  of 
book  containing  list  of  Foreign  Correspondents. 


FOREIGN  COMMERCIAL  FORMS 

Exhibit  "G" 

Reduced  Facsimile  Specimen  Copy  of 

CIRCULAR  LETTER  OF  CREDIT. 

Used  with  Letters  of  Indication. 


0000 


ft'*//-/fr/<f/  '/•'//////    rl>-s"  \J  Iff         \/uSht/t.i/t-f-/t<  J/''.i  f/'ts'f.  ,;/r//  fff/'t/.ij  t/'-ts 

aQ         -/'•    "  '    •  f 


150  FOREIGN  EXCHANGE  TEXT  BOOK 


Foreign  Drafts  or  Checks. 

Foreign  drafts  or  checks  (see  Exhibits  "H"  and  "I")/ 
payable  on  demand  for  any  amount  desired,  are  issued  by 
nearly  all  banks,  bankers  and  financial  institutions.  Some  of 
the  banks  and  bankers  in  the  larger  cities  keep  funds  deposited 
with  banks  at  the  principal  foreign  cities,  against  which  these 
drafts  are  drawn  direct,  while  most  banks,  bankers  and  foreign 
exchange  dealers  issue  drafts  through  an  arrangement  with 
concerns  having  foreign  accounts.  (See  Jobbers  of  Exchange.) 

They  are  usually  issued  in  the  currency  of  the  country 
where  payable,  that  is,  for  so  many  pounds,  shillings  and  pence 
on  England,  or  so  many  marks  and  pfennigs  if  on  a  place  in 
Germany,  etc.  In  lower  left  corner  a  space  is  provided  for  enter- 
ing the  name  of  the  bank  or  banker  abroad  who  will  cash  the 
draft  upon  presentation.  Nearly  all  foreign  drafts  are  payable 
under  an  "advice"  system,  as  follows:  At  time  of  issuance  of 
draft  a  form  of  notice  or  advice  giving  number  of  draft,  date 
of  issue,  amount  and  name  of  payee  (person  who  should  receive 
the  money)  is  sent  by  first  outgoing  mail  to  the  bank  or  banker 
abroad  whose  name  appears  on  draft  as  paying  correspondent, 
requesting-  that  the  draft  be  honored  upon  presentation;  such 
advices  bear  the  known  signature  of  an  official  of  the  bank 
issuing  same.  In  cases  where  issuing  bank  does  not  have  its 
own  foreign  accounts  the  "acivice"  of  issuing  bank  is  at  once 
mailed  to  the  jobbing  bank  or  concern  through  whom  the 
selling  bank  has  arranged  for  issuance  of  such  paper,  accom- 
panied by  check  for  net  amount  due  jobber,  whereupon  the 
jobbing  bank  immediately  mails  "advice"  to  foreign  bank. 


FOREIGN  COMMERCIAL  FORMS 


151 


w 


W    ^ 


DC 
u 

2 

o 


152 


FOREIGN  EXCHANGE  TEXT 


X 

u 


Cki 

o 


PQ 


FOREIGN  COMMERCIAL  FORMS  153 

Travelers'  Cheques. 

While  there  are  several  kinds  of  travelers'  cheques,  all  quite 
similar  in  form  and  intended  for  the  same  purpose,  we  shall  only 
undertake  to  describe  the  travelers'  cheques  of  the  American 
Express  Company,  >ince  that  company  was  the  originator  of 
the  system  and  its  cheques  are  best  known  throughout  the 
world'.  (See  Exhibit  "J.") 

These  cheques  are  designed  for  use  and  convenience  of 
travelers  and  tourists  in  the  United  States  and  all  foreign 
countries,  and  are  accepted  or  cashed  as  readily  as  would  be 
the  currency  of  the  country  where  traveling,  and  are  safer  to 
carry  than  gold  or  currency  by  reason  of  provisions  for  refunding 
on  lost,  stolen  or  destroyed  cheques.  These  cheques  might  be 
properly  termed  "International  Money"  or  "Universal  Currency" 
by  reason  of  their  being  accepted  in  every  civilized  country 
of  the  world  at  the  values  expressed  in  print  on  *heir  face. 

They  are  issued  in  fixed  denominations  of  $10,  $20,  $50, 
$100  and  $200  each,  in  American  money,  and  have  printed 
thereon  the  equivalent  values  in  the  moneys  of  the  various 
foreign  countries,  thus  enabling  holders  to  know  the  exact 
amount  they  should  receive.  .For  illustration:  Take  a  cheque 
of  820.00  denomination  as  per  Exhibit  "J."  Upon  the  face  it 
reads:  "When  countersigned  below  with  this  signature  (mean- 
ing holder's  or  purchaser's  signature)  the  American  Express 
Company  will  pay  to  the  order  of  (space  for  entering  name  of 
bank,  hotel,  etc.,  cashing  cheque)  $20.00.  In  the  United  States 
aud  Canada,  $20.00.  In  England,  Ireland  and  Scotland, 
£4  Is  8d.  In  France,  Belgium  and  Switzerland,  102  francs, 
50  centimes.  In  Germany,  83  marks  30  pfennigs.  In  Italy, 
(gold)  102  lire  50  centesimi.  In  Norway,  Sweden  and  Denmark, 
73  kronors,  39  ores.  In  Holland,  49  florins  2  cents.  In  Austria- 
Hungary,  98  kronen.  In  Russia,  38  rubles  46  kopecks."  Below 
this  is  the  printed  signature  of  the  treasurer  of  the  company 
and  space  for  counter-signature  of  holder. 

With  the  exception  of  the  purchaser's  signature,  which 
must  be  affixed  in  the  upper  left  corner  at  the  time  of  pur- 
chase, the  spaces  for  date,  place  of  payment,  to  whom  payable 
and  counter-signature  of  holder,  are  left  blank  to  be  filled  out 
at  the  time  of  use.  These  spaces  are  then  filled  out  just  as  you 
would  write  your  personal  check;  and  by  writing  your  signature 
thereon  in  the  presence  of  the  cashier  or  person  paying,  your 
identification  is  established,  no  other  identification  being  required. 

These  cheques  are  sold  at  the  face  value  plus  a  commission 
of  .V  of  1  per  cent  or  50  cents  per  $100,  upon  same  terms  as 
for  circular  letters  of  credit,  namely,  for  cash,  under  guaranty 
of  purchaser  for  reimbursement,  and  against  deposit  of  collat- 
eral security.  See  form  of  Guaranty,  Exhibit  "  K,"  and  form 
of  Collateral  Security  Contract,  Exhibit  "  L." 


154 


FOREIGN  EXCHANGE  TEXT  BOOK 


o 

a 


fi  B 

_cl    -     frl 

*  E  *r 

h-M 

u 

00 


W 


FOREIGN  COMMERCIAL  FORMS 

Exhibit  UK" 


155 


Reduced  Specimen  Copy  of  American  Express  Co. 

Travelers  Cheque  Guaranty. 


Received  from  the  American  Express  Company  its  Travelers  Cheques, 

as  follows- 


No. 

DENOMI- 
NATION. 

CHEQUES  NUMBERED 

FROM 

TO—  INCLUSIVE 

$10 

$20 

$50 

$100 

$200 

airiounting  to. 


.dollars   ($. 


-J. 


in  consideration  Whereof  we  hereby  -agree  to  reimburse  the  American 
Express  Company  on  demand  for  any  and  all  of  such  Cheques  paid  by 
the  Company  or  its  Correspondents,  together  with  usual  interest  and 
charges. 

In  case  such  Cheques  or  any  of  them  should  be  lost  or  stolen  we 
hereby  authorize  the  American  Express  Company  to  send  its  usual 
circular  to  its  correspondents  notifying  them  of  the  loss  or  theft,  and 
also  to  take  such  precautions  as  it  may  deem  advisable  for  the  preven- 
tion of  fraud,  we  agreeing  to  pay  any  expenses  attending  the  same. 


156 


FOREIGN7  EXCHANGE  TEXT  BOOK 


Exhibit  "L" 

Reduced  Specimen  Copy  of  American  Express  Co, 

Travelers  Cheque 

COLLATERAL  SECURITY  CONTRACT. 


/      630      \ 

U<H>«.  1«>  / 


Received  from  the  American  Express  Company  its  Travelers  Cheques, 

as  follows: 


NO. 

DENOMI- 
NATION. 

CHEQUES  NUMBERED 

FROM 

TO—  INCLUSIVE 

$10 

$20 

$50 

$1OO 

$2OO 

-dollars  ($. 


amounting  ^ • 

in  consideration  whereof  1  hereby  agree  to  reimburse  the  American 
Express  Company  on  demand  for  any  and  all  of  such  Cheques  paid  by 
the  Company  or  its  flgents,  with  interest  thereon  at  the  rate  of  five  per 
cent,  from  date  same  are  used,  together  with  a  commission  of  one-half 
of  one  per  cent.,  having  deposited  with  the  said  Company  as  security  for 
payment  of  above  named  Cheques,  the  following  property,  viz.  • 

(Enter  Description  of  Securities  in  detail.) 


In  the  event  of  no  other  provision  being  made  by  me  for  payment 
of  these  Cheques,  the  American  Express  Company  is  hereby  authorized  to 
sell  in  such  manner  as  it  may- deem  proper,  without  notice  or  demand, 
at  any  Broker's  Board  or  at  public  or  private  sale,  the  whole  or  any 
•part  of  said  securities,  and  apply  the  proceeds  to  pay  any,  either  or  all,  of 
said  Cheques,  subject  to  a  broKerage  charge  of  one-quarter  pf  1  per  cent. 


The  above-mentioned  securities 
were  handed  me  thin  day. 


Acent  American  Express  Co. 


FOREIGN  COMMERCIAL  FORMS  157 

Cable  Transfers  of  Money  to  Foreign  Countries. 

Cable  transfers  of  money  to  foreign  countries  are  made  in 
much  the  same  manner  as  are  telegraphic  transfers  of  money 
between  points  in  the  United  States.  To  economize  in  expense 
for  telegraphic  or  cable  charges,  and  as  a  matter  of  safety, 
banks  and  financial  institutions  in  performing  such  service  use 
a  telegraphic  cipher  code  containing  private  test  words.  By 
the  use  of  these  codes  a  whole  phrase,  representing  amount  to 
be  paid,  instructions  to  pay,  etc.,  is  often  contained  in  a  single 
code  word.  Where  money  is  frequently  cabled  to  the  same 
person,  company  or  firm  at  a  certain  address  abroad,  it  is  cus- 
tomary to  have  such  names  and  address  registered  with  the 
foreign  correspondent  at  place  of  payment  so  that  a  single 
word  would  represent  the  name  and  address  of  payee.  We 
give  under  this  heading  a  sample  cablegram  in  cipher  requesting 
payment  of  money  abroad  as  an  illustration  of  the  use  of  cipher 
codes  for  such  purpose. 

Cable  transfers  must  necessarily  be  effected  by  or  through 
banks  or  financial  concerns  who  have  special  arrangements 
for  such  service  and  who  have  balances  (money  or  credit)  with 
banks  abroad  where  payment  is  to  be  made.  An  order  to 
have  a  sum  of  money  paid  to  a  person,  say  in  London,  given 
to  a  bank  or  foreign  exchange  house  in  Chicago,  by  9:00  a.  m. 
would  usually  be  paid  in  London  the  same  day,  notwithstanding 
the  difference  in  time  between  these  two  cities  is  six  hours,  or 
in  other  words,  when  it  is  9:00  a.  m.  in  Chicago  it  is  3:00  p.  m. 
in  London. 

It  is  customary  to  charge  a  higher  rate  of  exchange  for  a 
cable  transfer  than  for  a  draft  or  check  of  like  amount  and  the 
sender  is  expected  to  pay  the  cost  of  telegraph  and  cable  charges. 

Form  of  Cipher  Cablegram  Requesting  Payment  of  Money  Abroad. 

ILLUSTRATION. — The  firm  of  H.  J.  Meyerfield  &  Co.  of 
Chicago  wish  to  have  two  thousand  five  hundred  pounds  sterling 
paid  to  Johnson,  Gladstone  &  Co.,  153  Threadneedle  St.  (E.  C.), 
London,  England,  for  their  account. 

The  message  given  to  telegraph  company  for  transmission 
would  be  as  follows  (cipher  words  are  fictitious) : 

NATIPROV,  LONDON,  MURTIER,  MYERSON,  MARDADIE. 

Translated,  these  cipher  words  would  mean: 

(XATIPROV) — To  the  National  Provincial  Bank  of  England,  Ltd. 

(LONDON) — London,  England. 

(MURTIER) — Pay  to  the  person(s)  named  in  this  cablegram. 

(MYERSON) — Johnson,  Gladstone  &  Co.,  153  Threadneedle  St., 
(E.  C.)  London,  for  account  of  H.  J.  Meyerfield  &  Co.,  Chicago,  111., 
U.  S.  A.  (Registered). 

(MARDADIE) — (£ 2,500)  Two  thousand  five  hundred  pounds  sterling. 

NOTE. — Each  bank  and  financial  concern  transacting  business  of 
this  kind  uses  different  cipher  words  and  as  a  rule  have  a  different  system 
of  test  words,  the  above  illustration  being  given  to  show  only  the  general 
method  used  in  the  transfer  of  money  by  cable. 


158  FOREIGN  EXCHANGE  TEXT  BOOK 


Foreign  Postal  Remittances. 

One  of  the  most  popular  and  satisfactory  methods  of 
remitting  money  to  places  in  Russia,  Italy,  Norway,  Sweden, 
Denmark,  Austria-Hungary,  Finland,  and  to  some  sections  of 
other  European  countries,  is  by  what  is  known  as  the  Foreign 
Postal  Remittance,  or  Bank  Post  Money  Order  (see  Exhibits  "M '' 
and  "  N").  This  is  a  system  intended  to  provide  for  payment 
of  money  at  smaller  places  where  there  are  no  banks,  but  by  reason 
of  its  convenience  it  is  very  often  used  even  though  there  are 
banks  at  point  of  payment.  Among  the  less  educated  foreign 
classes  it  is  used  almost  exclusively  for  remittance  to  the  coun- 
tries named,  since  the  sender  has  only  to  furnish  the  address 
of  the  person  abroad  to  whom  it  is  desired  the  money  should 
be  paid  and  the  payment  is  arranged  for  and  effected  by  the 
bank  or  dealer  selling  the  exchange.  A  foreign  postal  remittance 
blank  usually  comprises  four  stubs:  the  first  being  the  selling 
bank's  record  or  memorandum  of  the  transaction;  the  second, 
the  advice  of  the  bank  or  dealer,  containing  the  complete  name 
and  address  of  sender,  amount  in  foreign  money  to  be  paid, 
and  name  of  sender,  which  is  either  sent  to  the  jobber  in  this 
country  through  whom  selling  bank  or  dealer  transacts  its 
foreign  remittance  business  or  is  sent  direct  abroad  by  the 
sellers  to  their  own  correspondents  with  whom  they  keep  an 
account.  The  third  stub  is  a  form  of  receipt  which  is  given 
to  the  sender  to  keep,  and  the  fourth  (not  always  used)  is  a 
stub  upon  which  is  printed  in  all  the  various  foreign  languages 
a  notice  to  the  payee  to  the  effect  that  a  certain  sum  of  money 
had  been  sent  to  them  and  in  case  it  is  not  received  within  a 
reasonable  length  of  time  they  should  communicate  with  a 
certain  bank  or  agency  named  to  whom  was  intrusted  the 
forwarding  of  the  money. 

When  money  is  sent  by  this  method  the  purchaser  or  sender 
is  not  given  a  draft  or  check  to  mail  to  payee,  but  instead  the 
sender  relies  upon  the  selling  bank  or  dealer  to  effect  payment, 
which  is  done  in  following  manner: 

The  selling  bank  or  jobber,  upon  receipt  of  the  advice 
form  giving  address  of  payee,  amount,  etc.,  sends  this  "advice" 
to  its  nearest  principal  bank  correspondent  in  the  country  in 
which  the  payment  is  to  be  made.  The  foreign  bank  corre- 
spondent encloses  in  an  envelope  the  exact  amount  in  currency 
of  country  where  payable  and  registers  the  package  of  currency- 
direct  to  address  of  payee  through  the  postoffice,  and  it  is 


FOREIGN  COMMERCIAL  FORMS  159 

then  delivered  by  the  local  postmaster  or  mail  carrier  at  the 
place  payable,  just  as  letters  or  packages  are  sent  by  registered 
mail  in  this  country. 

The  convenience  of  this  system  lies  in  the  fact  that  payee 
is  not  obliged  to  take  a  check  to  a  bank  and  be  identified  before 
he  can  obtain  his  money,  and  where  the  payee  is  unfamiliar 
with  banking  methods,  as  is  often  the  case  with  the  poorer 
classes  of  people,  it  is  far  more  satisfactory  to  have  the  exact 
amount  in  the  currency  of  the  country  delivered  to  him  at  his 
residence  or  place  of  business. 

In  the  sale  of  foreign  postal  remittances  it  is  customary 
to  charge,  in  addition  to  the  market  rate  of  exchange  for  amount 
in  foreign  money,  a  postage  fee  for  registration  abroad,  usually 
10  to  15  cents  for  each  remittance. 

It  is  always  of  great  importance  in  transactions  of  this  nature 
that  the  name  and  address  of  the  payee  be  very  complete  and 
accurate. 


160  FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "M" 

Reduced  Facsimile  of  American  Express  Co. 

FOREIGN  POSTAL  REMITTANCE. 


00 


I    o. 


s       -s 
u.        < 


tiii[  mi 

ml  m  miii- 


FOREIGN  COMMERCIAL  FORMS 


161 


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162 


FOREIGN  EXCHANGE  TEXT  BOOK 


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FOREIGN  COMMERCIAL  FORMS  163' 


Foreign  Postal  Money  Order. 

The  United  States  Government  issues  at  postoffices  in 
principal  towns  and  cities  an  international  money  order,  limited 
in  amount  to  $50.00  or  the  equivalent  in  foreign  money,  which 
is  payable  in  principal  foreign  countries.  These  orders  are 
sold  at  a  fixed  rate  of  exchange  plus  a  fee  (see  Exhibits  "P" 
and  "Q")-  A  receipt  bearing  duplicate  number  and  also  con- 
taining name  and  address  of  payee  is  given  to  the  purchaser  to 
keep  (see  Exhibit  "Q"). 


164 


UNITED  SXAXECS  OK  AMtCKICA. 

Chicago,  Illinois      J^s  243114 


The  ADVICE  sent  to  Exchange  Office  at 


Country  of  Pay 


(Write  jHfove  "  Bussla,"  or  "  Italy,"  etc.) 

INTERNATIONAL 

MONEY  ORDE 


)REIGN  MONEY 


•3  O 


-,    U 

S  o 

°  2 

I  I- 

1; 

1 1 

&  i 

0 


TE  INTERNATIONAL. 


The  Postmaster  at 

L' 'Agent  des  Posies  A 


Pays 

Pay  to  the  person  named  in  my 
Payez  h.  la  iersontu  nommie  d, 


this  number,  the  sum  of 
e  muniro,  la  somine  de 


should  compare  amount  in  order  and  receipt. 


Postmaster. 


(P^e  of  issue.) 


INSTRUCTIONS  TO  REMITTERS. 

If  payable  in  France,  Algeria,  Great  Britain,  or  a  British  Colony,  send  this  order 
to  payee,  who  should  present  it  for  payment  at  office  drawn  on. 

If  payable  in  any  other  country,  the  amount  will  be  paid  on  another  form,  issued 
by  the  country  of  payment. 


Received  the  amount  of  the  above  Order. 
Rc(v  It  montant  du  tttandai  ci-desfus. 


Stamp  of  paying  office. 


REMITTER  SHOULD  KEEP  THIS  RECEIPT. 

Chicago,  Illinois    Jfe    243114 


The  ADVICE  &BOrt*tahange  Office  at 


M 


Gre«c«,"  or  "Ittlj/'ete.) 

ECEIPT 

POM 

INTERNATIONAL 

MONEY  ORDER. 
**\      RKCU  D'UN 
ftf  DE  P08TE  JNTERHATIOHAL 


REIGN  MONEY 


Payable  at ) 
Payable  a    }  _ 


/  Country  \ 

\    Pays    ) 

For  the  sum  of 


Iffigtter  should  compare  amount  in  order  and  recei 


FEfi  2  6  1906 


Postmaster. 


Department,  Province  or  Count  j 
Dtparttmettt,  Province  ou  Cajfof}  , 


Name  of  Remitter 
No*t  de  L ' E  .xptditeur 


166  FOREIGN  EXCHANGE  TEXT  BOOK 

Foreign  Commercial  Bill  of  Exchange. 

The  basis  of  a  foreign  commercial  bill  of  exchange  is,  as 
its  name  implies,  a  commercial  transaction  of  international 
character,  which  consists  in  the  purchase  of  goods  or  commodities 
in  one  country  for  export  to  another  country.  The  "draft" 
represents  the  money  value  of  the  goods  which  is  due  the 
exporter.  The  bill  of  lading  is  the  contract  between  the  trans- 
portation company  and  the  shipper  for  the  carrying  of  the 
goods  and  also  serves  as  the  order  for  their  delivery.  The 
insurance  certificate  is  the  certification  of  the  Marine  Insurance 
Company  of  reimbursement  in  case  goods  are  lost  by  fire  or 
accident  while  enroute  on  the  ocean.  These  three  documents — 
the  draft,  bill  of  lading  and  insurance  certificate — comprise 
what  is  termed  a  foreign  commercial  bill  of  exchange.  They 
are  almost  invariably  issued  in  duplicate,  for  fear  one  set  may 
be  lost  in  its  transmission  abroad  by  mail;  one  of  each  set 
being  marked  original  and  the  other  duplicate,  or  sometimes  one 
of  the  drafts  will  read  First  of  Exchange  and  the  other  Second 
of  Exchange. 

Foreign  commercial  bills  of  exchange  are  also  known  as 
documentary  bills  of  exchange  by  reason  of  the  bill  of  lading 
and  insurance  certificate  accompanying  the  draft.  It  is  cus- 
tomary to  send  the  originals  of  the  three  documents  by  first 
steamer,  the  duplicates  or  seconds  by  following  steamer.  If 
the  original  set  is  lost  the  duplicate  serves  the  same  purpose, 
and  vice  versa. 

The  process  by  which  a  foreign  commercial  bill  of  exchange 
drawn  against  commodities  exported  is  created  and  handled 
and  reaches  its  destination  may  best  be  illustrated  by  an  actual 
transaction;  and  for  such  purpose  the  illustration  will  be  given 
of  a  commercial  bill  of  exchange  drawn  against  a  shipment 
of  flour,  flour  being  one  of  our  chief  exportable  commodities. 

The  shipment  of  flour  in  question,  destined  to  Liverpool, 
Eng.,  was  delivered  to  the  Soo  Freight  Line  at  Minneapolis, 
Minn.,  operating  over  the  Minneapolis,  St.  Paul  &  Sault  Ste. 
Marie  and  Canadian  Pacific  Railways,  and  a  "through"  bill 
of  lading  in  duplicate  was  obtained.  This  through  bill  of 
lading  is  a  form  of  contract  issued  by  virtue  of  special  arrange- 
ments with  connecting  ocean  lines,  by  the  term  of  which  it  is 
agreed,  under  conditions  printed  thereon,  to  transport  the 
shipment  through  to  destination  at  foreign  port  (Liverpool). 
It  states  the  number  of  packages,  how  they  are  marked,  their 
contents,  the  particular  grade  or  brand  of  flour  and  the  name 
and  location  of  the  party  for  whom  goods  are  intended.  It  is 
negotiable  only  by  endorsement  of  the  exporter,  to  whose  order 
it  is  drawn.  (See  Exhibit  "R.") 

Upon  presentation  of  this  evidence  of  shipment  a  marine 
insurance  company  has  issued  a  certificate  of  insurance,  under 


FOREIGN  COMMERCIAL  FORMS  167 

the  terms  of  which  they  agree  to  reimburse  the  owner  of  the 
goods  in  case  of  the  loss  of  the  shipment  by  fire  or  accident 
while  enroute  on  the  ocean.  This  shipment,  as  is  the  usual 
custom,  is  insured  for  about  20  per  cent  in  excess  of  its  billed 
value.  (See  Exhibit  "S.") 

The  exporter  then  attached  to  these  documents  a  draft 
for  the  amount  for  which  flour  was  sold,  namely  £457  12s  lOd. 
Had  this  shipment  been  destined  to  a  point  in  Germany,  the 
draft  would  have  been  drawn  in  marks;  if  to  France,  in  francs, 
etc.;  usually  in  the  money  of  the  country  to  which  it  is  going, 
but  very  often  it  is  drawn  in  English,  French  or  German  money 
although  destined  to  some  other  countries,  by  reason  of  exchange 
on  countries  named  being  preferred.  (See  Exhibit  "T.") 

In  this  case  the  exporter  agreed  to  allow  the  buyer  sixty 
days'  time  in  which  to  pay  draft,  after  its  presentation.  The 
original  draft  reads:  "Sixty  days  after  sight  of  this  first  of 
exchange  (second  unpaid)  pay  to  the  order  of  ourselves  457 
pounds,  12  shillings  and  10  pence,  against  Soo  Line  through 
B-L.  No.  1548,  dated  May  16,  1901,  for  2,000  sacks  flour, 
branded  'Dakota,'"  and  is  signed  "Northwestern  Consolidated 
Milling  Co.,  by  H.  E.  Kent,  Cashier,"  the  latter  being  termed 
the  "drawers."  In  the  lower  left-hand  corner  it  reads:  "To 
James  Corwith  &  Co.,  Liverpool,  Eng.,"  they  being  the  buyers, 
or,  as  we  term  them,  the  "drawees." 

Now  these  three  documents  drawn  to  the  order  of  the 
exporters  (Northwestern  Consolidated  Milling  Co.)  comprise  a 
commercial  bill  of  exchange.  (See  Exhibits  "R,"  "S"  and  "T.") 

Upon  the  same  day  that  these  documents  were  issued  and 
practically  before  the  flour  had  started  on  its  long  journey,  the 
exporters  offered  this  bill  of  exchange  for  sale.  It  was  sold 
to  the  Security  Bank  of  Minnesota,  Minneapolis  (they  being 
the  highest  bidders)  at  the  rate  of  $4.84  per  pound,  who  in  turn 
resold  it  to  the  American  Express  Company  at  S4.84J  per 
pound.  The  endorsements  on  back  of  draft  upon  its  return 
from  abroad  read: 

"Northwestern  Consolidated  Milling  Co.,  by  H.  E.  Kent, 
Cashier." 

"Security  Bank  of  Minnesota,  by  Thomas  F.  Hurley, 
Cashier." 

"Pay  to  the  order  of  National  Provincial  Bank,  Liverpool, 
American  Express  Co.,  by  James  F.  Fargo,  Treas." 

The  latter  indorsement  shows  the  papers  to  have  been 
sent  to  Liverpool  for  collection.  The  bank  at  Liverpool  notified 
James  Corwith  &  Co.  to  call  and  accept  draft,  which  they  did 
by  writing  "accepted"  and  the  date  over  their  signature. 

About  fifteen  days  afterward  the  flour  arrived  by  slow 
steamer,  and,  being  in  immediate  need  of  it  Corwith  &  Co.,  in 
order  to  obtain  the  bill  of  lading  had  to  pay  the  draft,  the 


168  FOREIGN  EXCHANGE  TEXT  BOOK 

instructions  stamped  on  draft  reading:  "Surrender  documents 
upon  payment  only."  Now,  as  Corwith  &  Co.  paid  this  draft 
forty-five  days  before  it  was  due,  the  bank,  as  is  customary, 
allowed  them  the  prevailing  rate  of  discount  applicable  to  that 
class  of  bilis,  which  was  2  per  cent  (or  £1  3s  5d).  The  differ- 
ence, £456  7s  5d  was  placed  to  the  credit  of  the  American 
Express  Co.  by  the  bank,  which  closed  the  transaction.  Had 
the  instructions  on  draft  read  "Surrender  documents  upon 
acceptance  of  draft,"  the  bill  of  lading  would  have  been  delivered 
to  Corwith  &  Co.  when  draft  was  accepted,  thus  enabling  Corwith 
&  Co.  to  obtain  goods  at  once  and  pay  the  draft  sixty  days  after- 
ward, or  at  its  maturity. 

The  method  of  determining  the  value  of  this  commercial 
bill  of  exchange,  that  is,  what  could  be  paid  for  it,  was  based 
upon:  1st,  the  price  demand  exchange  on  Liverpool  could  be 
sold  for;  2d,  the  cost  of  revenue  stamps  to  be  affixed  when 
draft  was  accepted  abroad;  3d,  the  interest  for  the  number 
of  days  for  which  draft  was  drawrn  plus  three  days  of  grace 
(63  days).  To  better  illustrate  the  method  of  buying  this 
particular  bill,  or  rather,  of  determining  wrhat  could  be  bid  for 
same  and  allow  a  reasonable  profit,  the  following  figures  are 
given : 

Rate  per  £  at  which  exchange  on  Liverpool  could  be 

sold  upon  date  of  purchase 4 .  8655 

Cost  of  revenue  stamps  pe/  £  which  had  to  be  affixed 
to  draft  when  accepted  (1-20  of  1%  of  rate,  or  Is 
per  £  100  or  fraction) 0024 

Interest  per  £  for  63  days  at  2%  (discount  rate) 0167  . 0191 

Net  worth  of  bill  after  being  discounted    per  £  S4.8464 

PROFIT  TO  PURCHASERS: 

The  Security  Bank  of  Minn,  paid  $4.  84  per  £  and  sold  same  at  4.84J 
per  £,  or  i  cent  higher,  which  on  £457. 12s.  lOd.  netted  them  for 
their  endorsement  of  the  draft  and  trouble SO .  57 

The  American  Express  Company  paid  $4.  84 .J  per  £  and  sold  demand 
draft(s)  against  same  on  same  day  payable  in  Liverpool  at  rate 
of  $4.8655  per  £,  which  on  £457  12s  lOd  netted  them  for 
their  endorsement,  investment  of  $2215.56  (cost)  and  trouble  of 
collecting,  $2. 29,  or  $  cent  per  pound  profit. 

Frequently  shippers  attach  to  the  other  documents  an  invoice 
of  the  shipment,  which  was  done  in  the  case  above  cited.  (See 
Exhibit  "  IT.") 


FOREIGN  COMMERCIAL  FORMS 

Exhibit  "R" 

Reduced  Facsimile  of  a  Foreign 

THROUGH  BILL  OF  LADING. 


169 


IT  is  HEREBY  AGREED,  that  any  loss  < 


IT  IS  HEREBY  AGREED,  that  any  loss  or  claim  under  this  Certific 
the  Company,  ,n  Liverpool,  at  the  rate  of  Four  Dollars  and  ninety-fiv 
Jnsuran  adjusted  according  to  the  usages  of  Lloyds,  but  subject  to 

NOTICE.—  To  conform  with  the  Revenue  Laws  of  Great  Britain,  in 
must  be  stamped  within  ten  days  after  its  teceipt  in  the  United  Kingdo 


ate,  shall  be  paid  in  Sterling,  at  the 
cents  (*4flfi,)  Gold  to  the  Pound 
the  conditions  of  the  Policy  and  Co 


offices  of 
Sterling. 
:t  of 


order  to  collect  a  claim  under  this  Certificate, 


j  uoi)«Jiiqjr;  \\v  XL  J 


•lusujsajSE  jnoi))iA\  apEUJ  sq  oj  si  uoipns  )B  3|ES  OM    ''s 

}0  ssra  ui  jssor  aifj  '|BUi)  x\  oj  uoisi»p  sjq  p'ue  J0»cj)iqjc  JsqjouB  ssooqs  O)  Xsqj  ' 
ui  pue  'XjjBd  t)3Ea  Xq  pijuiodde  3uisq  joAsAjns  E  :  uoiie.uiq.rc  Aq  pa|»3S  sq  oj  sj  sso|  'psjndsip  si  nuBAVOHK  sm  3SE3  u| 
•AUEduiOQ  sq)  Xq  pajuiodde  X|np  ioXsAjns  B  Xq  passassr;  aq  oj  ajt  ajcsijiyaj  siqj  japurt  a3uujup  joj  suiiep  ny 

•u*ou>)  SE  uoos  SB  'sjuaSy  Jjaqi  Jo  'XuEdiuo^  aqj  oj  payodaj  aq  ||rqs  aji'MJiuaO  5ri|j  japun 
pwnsuj  Xjjadojd  airj  o}  3uiuaddBq  s3EUJBp  jo  sso|  jo  sasES  |]B  jsifl  'aaaaov  QNV  aooiSaaaNn  A83a3H  SI  i| 


172 


FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "U" 

Reduced  Facsimile  of 

INVOICE  OF  SHIPMENT 

To  a  Foreign  Country 


FOREIGN  COMMERCIAL  FORMS  173 

Commercial  Letters  of  Credit. 

A  commercial  letter  of  credit,  or,  as  sometimes  called, 
a  mercantile  letter  of  credit,  instead  of  being  designed  for  use 
in  obtaining  funds  to  meet  expenses  of  travel,  as  is  the  case 
with  a  circular  letter  of  credit,  is  intended  for  use  of  mercantile 
houses  desiring  to  import  goods,  in  obtaining  credit  in  the 
purchase  of  goods  in  a  foreign  country.  (See  Exhibit  "V.") 

It  is  not  necessary  for  the  purchaser  of  a  commercial  letter 
of  credit  to  present  same  in  person.  Should  he  desire  to  make 
purchases  or  obtain  credit  with  a  foreign  merchant  he  can 
forward  credit  to  the  merchant  for  that  purpose.  Through 
these  credits  goods  can  be  purchased  in  any  part  of  the  world, 
either  for  cash  or  upon  30,  60,  90  days  and  often  six  months 
time,  according  to  agreement. 

Upon  presentation  of  proper  evidence  of  shipment  of 
goods,  comprising  bill  of  lading,  certificate  of  marine  insurance 
and  sometimes  certificates  of  analysis  or  inspection,  depending 
upon  nature  of  shipment,  a  foreign  bank  at  point  goods  are 
snipped  from  would  purchase  the  shipper's  draft  for  value  of 
shipment,  drawn  on  the  bank  or  concern  named  on  face  of  credit, 
at  the  buying  rate  for  that  class  of  commercial  paper.  That 
is,  if  credit  and  draft  were  drawn  in  pounds  sterling  "(English 
money)  on  London  the  local  bank  would  buy  draft  at  the 
market  rate  of  exchange  for  that  class  of  paper  on  London 
and  reimburse  itself  by  sending  the  draft  and  accompanying 
documents  for  credit  or  collection  to  London  as  instructed  on 
credit  or  by  reselling  same  in  the  open  market. 

In  the  use  of  these  credits,  the  foreign  merchant  is  usually 
required  under  oath,  before  an  American  consul,  to  make  out 
an  invoice  of  the  goods  shipped. 

Commercial  letters  of  credit  are  issued  in  pounds  sterling 
on  England,  in  francs  on  France  or  in  marks  on  Germany, 
according  to  request  of  purchaser,  but  more  often  are  issued 
in  pounds  sterling  for  the  reason  they  are  more  easily  and 
advantageously  negotiated  throughout  the  world. 

Commercial  letters  of  credit  are  usually  issued  in  four 
parts.  One  is  sent  to  the  exporter  abroad,  one  to  the  bank 
named  on  face  of  credit  in  London,  Paris  or  Berlin,  as  case 
may  be,  as  their  authority  to  accept  drafts  drawn  against  same, 
one  copy  is  given  to  purchaser  or  importer  here,  and  the  fourth 
copy  is  retained  by  the  seller  of  the  credit.  On  the  back  of 
the  copies  held  by  the  purchaser  and  selling  bank  or  concern 
issuing  same,  is  a  form  of  agreement  as  per  Exhibit  "  W." 

Not  infrequently  sellers  of  commercial  letters  of  credit 
exact  from  the  purchaser  a  trust  receipt  in  form  as  per  Exhibit 
"X,"  the  object  being  to  enable  the  seller  of  the  credit  to  retain 
legal  title  to  the  goods  shipped  until  drafts  drawn  for  cost  of 
goods  are  paid. 


174  FOREIGN  EXCHANGE  TEXT  BOOK 

Commercial  letters  of  credit  are  extensively  used  by  mer- 
chants in  the  purchase  of  goods  in  foreign  countries,  since  it 
would  be  very  difficult  if  not  impracticable  for  a  foreign  mer- 
chant to  keep  close  track  of  the  financial  standing  of  a  customer 
located  in  a  distant  land. 

The  terms  of  issue  of  these  credits  vary  according  to  the 
length  of  time  drafts  are  drawn  payable,  to  the  financial  re- 
sponsibility of  applicants  for  credit  and  to  numerous  conditions 
too  variable  to  explain. 


FOREIGN  COMMERCIAL  FORMS  175 

Exhibit  "V" 

Reduced  Facsimile  of 

COMMERCIAL  LETTER  OF  CREDIT. 
COPY 


}  /wxt  Js>,j/ri7s/s sit 

I ;  *fc^  ^  AMERICAN  EXPRESS  COMPANY  AT  . 


!   J#r 


y  J&r  ^ntwttC'  soft  ^?jp 
r  f 


%Ctl&' 

sz>?u£ 

•^/rt&&/%&J0rvn0r/a&z?nfta*Uita£ 
& 
WflaWMat- 


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P"| 


176  FOREIGN  EXCHANGE  TEXT  Boos 

Exhibit  "W" 

Reduced  Specimen  Copy  of  Agreement  for 

COMMERCIAL  LETTER  OF  CREDIT. 


.190- 


1o  the  AMERICAN  EXPRESS  COMPANY, 

New  York,  N.  Y. 
Gentlemen: 

Having  received  from  you  the,  Commercial  Letter  of  Credit  of  which 
a  true  copy  is  on  the  reverse,  Je  hereby  agree  to  its  terms,  and  in  consider, 
ation  thereof  bind  0™rseivea  to  reimburse  you 


the  Bills  drawn  in  virtue  thereof,  at  the  current  rate  of  exchange  for  prime 
Bankers  Bills. 

It  is  understood  that  the  commission  under  this  Credit  shall  be 

per  cent  - 


Should  £e  anticipate  the  payment  of  any  portion  of  the  amount  pay- 
able, interest  at  the  rate  of per  cent  per  annum  is  to  be  allowed. 

we  hereby  give  you  a  specific  claim  and  lien  on  all  goods  and  merchandise, 
and  the  proceeds  thereof,  for  which  you  may  have  paid  or  obligated  your- 
selves under  this  Credit,  and  on  all  policies  of  insurance,  which  ,f.e  hereby 
agree  to  effect  on  such  goods  and  merchandise  to  an  amount  sufficient  to 
cover  your  advances  or  engagements  under  this  Credit.  WK  further  agree 
that  the  title  to  all  bills  of  lading  covering  merchandise  shipped  under  this 
Credit  shall  be  and  remain  in  you  until  payment  of  all  obligations  incurred 
by  you  thereunder,  notwithstanding  such  bills  of  lading  may  have  been 
previously  endorsed  by  you.  we  further  give  you  full  power  and  authority 
to  take  possession  of  the  said  merchandise  and  to  dispose  thereof  at  your 
discretion  for  your  reimbursement  as  aforesaid,  at  public  or  private  sale, 
and  to  charge  all  expenses,  including  commission  for  sale  and  guarantee; 
and  we  also  agree  to  give  you  any  additional  security  that  may  be  demanded, 

we  hereby  guarantee  upon  your  executing  the  aforesaid  Letter  of 
Credit,  that  you  shall  not  be  held  responsible  for  the  correctness  of  the  signa- 
tures of  the  documents  representing  shipment  or  shipments  under  said 
Credit,  nor  for  the  quality  or  genuineness  of  the  merchandise  declared  in 
said  documents,  notwithstanding  such  bills  of  lading  may  have  been  pre- 
viously endorsed  by  you  covering  such  shipments. 

In  case  we  should  hereafter  desire  to  have,  this  Credit  confirmed,  altered 
or  extended  by  cable  (which  will  be  at  "«r  expense  and  risk),  we  hereby  agree 
to  hold  you  harmless  and  free  from  responsibility  for  errors  in  cabling  on 
the  part  of  the  cable  or  telegraph  companies. 

we  further  authorize  you  to  cancel  this  Letter  of  Credit  at  any  time  to 
the  extent  that  it  shall  not  have  been  acted  upon  when  notice  of  revocation 
is  received  by  the  user. 

This  obligation  is  to  continue  in  force,  and  to  be  applicable  to  all  trans- 
actions, notwithstanding  any  change  in  the  composition  of  the  firm,  firms. 
Company  or  Corporation,  parties  to  this  contract,  or  of  the  user  of  this 
Credit. 


FOREIGN  COMMERCIAL  FORMS  177 

Exhibit  "X" 

Reduced  Specimen  Copy  of  Trust  Receipt  for 

COMMERCIAL  LETTER  OF  CREDIT. 


from   the   American    Express  Company    the  follow- 
ing merchandise,  their  property,    specified   in   the   Bill  of   Lading  per 


dated marked  and  numbered  as  follows: 


»nd  in  consideration  thereof,  <we)  hereby  agree  to  hold  said  merchandise 
in  trust  for  the  American  Express  Company,  and  as  their  property,  with 
liberty  to  sell  the  same  for  their  account,  and  further  agree,  in  case  of 
sale,  to  hand  the  proceeds  to  said  Company,  to  apply  against  their  accept- 
ances on  (ourl  account,  under  the  terms  of  Letter  of  Credit  No ~. 

issued  for  ((£uV,' account  and  for  the  payment  of  any  other  indebtedness  of 
(wn)'  to  the  said  Company. 

The  American  Express  Company  may  at  any  time  cancel  this  trust 
and  take  possession  of  said  merchandise,  or  of  the  proceeds  of  such  of  the 
same  as  may  then  have  been  sold,  wherever  the  said  merchandise  or  pro- 
ceeds may  then  be  found.  In  the  event  of  any  suspension,  or  failure,  or 
assignment  for  the  benefit  of  creditors,  on  ((^r>  part,  or  of  the  non-fulfill- 
ment of  any  obligation,  or  of  the  non-payment  at  maturity  of  any  accept- 
ance made  under  said  Credit,  or  under  any  other  Credit  issued  by 
the  American  Express  Company  on  [our)  account,  or  of  the  non-pay- 
ment of  any  indebtedness  on  (£J,V)  part  to  said  Company,  all  obligations, 
acceptances,  indebtedness  and  liabilities  whatsoever  shall  thereupon  (with 
or  without  notice)  mature  and  become  due  and  payable. 

ewe,  further  agree  to  keep  said  merchandise  while  in  ffir}  hands  fully 
insured  against  loss  by  fire. 


Dated. 
£ 


CHAPTER  X, 

TERMS  AND  EXPRESSIONS  USED  IN 
FOREIGN  EXCHANGE 
TRANSACTIONS. 

Terms  and  expressions  are  frequently  used  in  foreign 
exchange  transactions,  as  in  other  lines  of  trade,  which,  naturally 
are  not  clearly  understood  except  by  those  thoroughly  familiar 
with  the  business.  In  this  chapter  we  shall  undertake  to  explain 
in  as  comprehensive  a  manner  as  possible  the  use  and  meaning 
of  the  terms  and  expressions  most  frequently  used. 

ACCEPTANCE.  The  common  title  given  to  drafts  and  bills 
of  exchange  after  they  have  been  accepted.  A  formal  agree- 
ment by  signature  to  pay  a  draft  or  bill  of  exchange  according 
to  its  terms.  The  acceptance  of  a  draft,  bill  of  exchange  or 
other  document  consists  of  writing  the  word  "accepted"  on  the 
face  thereof,  over  the  date  and  signature  of  the  acceptor,  who 
in  the  case  of  a  draft  is  the  drawee,  or  his  agent. 

Drafts  drawn  against  exports  are  frequently  made  payable 
say,  30,  60  or  90  days  AFTER  SIGHT,  which  means  after  they  are 
sighted  by  the  drawee;  hence  the  importance  of  immediately 
presenting  drafts  for  acceptance.  The  acceptor  of  a  draft 
admits  the  obligation  and  acknowledges  he  is  liable  for  the 
debt.  Should  the  drawee  refuse  to  accept  a  draft,  the  maker 
(drawer),  or  indorser,  may  proceed  bylaw  to  collect  amount 
due  without  waiting  the  maturity  of  the  draft.  When  a  draft 
is  accepted  by  other  than  the  drawee  or  his  authorized  agent, 
it  is  called  ACCEPTANCE  FOR  HONOR. 

An  acceptance  of  a  draft  or  bill  of  exchange  is  considered 
"general"  when  not  qualified  by  word  "special"  and  made  pay- 
able at  a  specified  time  and  place.  The  acceptance  is  termed 
"qualified"  when  accepted  for  a  sum  less  than  named  on  face 
of  bill,  and  for  honor  or  "supra  protest"  when  accepted  by  a 
person  other  than  the  drawee. 

ACCEPTANCE  FOR  HONOR.  Where  a  draft,  bill  of  exchange 
or  other  document  has  been  accepted  for  the  honor  of  the 
drawee  or  an  indorser,  after  it  has  been  protested  for  non- 
acceptance. 

If  a  drawee  of  a  bill  declines  to  accept  it  when  presented, 
or  to  pay  it  after  acceptance,  any  person  may  accept  or  pay  it 
for  the  honor  of  the  drawer,  or  of  an  indorser,  by  going  before  the 
notary  public  who  protested  the  bill  and  making  declaration 
that  he  accepts  or  pays  the  bill  FOR  HONOR.  It  should  be  stated 

179 


180  FOREIGN  EXCHANGE  TEXT  BOOK 

for  whose  honor  bill  is  accepted  or  paid  and  the  notary  public 
should  make  note  thereof. 

ADVICE.  When  used  in  connection  with  foreign  exchange 
transactions,  refers  to  the  notice  or  letter  from  the  issuer  (drawer) 
of  a  draft  or  bill  of  exchange  to  the  bank  or  correspondent 
abroad  upon  which  the  bill  is  drawn,  asking  that  the  draft  or 
bill  be  duly  honored  upon  presentation,  and  generally  instructs 
as  to  the  manner  of  reimbursement  or  disposition.  Nearly 
all  foreign  drafts  issued  are  payable  only  upon  receipt  by  the 
bank  or  correspondent  upon  which  draft  is  drawn  of  the  advice 
of  issuance,  which  contains  the  number,  date,  amount,  name 
of  issuer  and  payee  of  the  draft.  It  is  always  very  important 
that  the  advice  be  forwarded  by  mail  upon  the  same  steamer 
carrying  the  draft,  otherwise  it  might  result  in  delay  in  pay- 
ment of  draft. 

AFTER  SIGHT.  After  presentation  or  after  acceptance  of 
a  draft  or  bill  of  exchange.  Drafts  are  drawn  payable  "at  sight" 
or  a  certain  number  of  days  "after  sight."  If  at  sight  it  would 
be  payable  upon  presentation,  provided  no  days  of  grace  are 
allowed  by  the  terms  of  the  contract;  if,  say,  30  days  after  sight, 
it  would  be  due  and  payable  30  days  after  the  draft  was  accepted, 
plus  days  of  grace,  if  any. 

ALLONGE.  Is  the  term  given  to  a  piece  of  paper  attached 
to  a  draft  to  receive  indorsements  when  the  draft  itself  has  not 
sufficient  space  thereon  to  receive  same. 

BILL  OF  EXCHANGE.  Usually  refers  to  a  draft  drawn  pay- 
able in  a  foreign  country.  If  drawn  for  the  value  of  goods 
exported,  and  the  bill  of  lading  and  insurance  certificate  are 
attached,  it  is  termed' a  "documentary  bill  of  exchange."  If  no 
documents  accompany  same  it  would  be  called  a  "clean  bill  of 
exchange."  Bills  of  exchange  are  usually  drawn  in  duplicate, 
the  originals  being  sent  abroad  by  first  outgoing  steamer,  the 
duplicates  by  following  steamer.  (See  Commercial  Bills  of 
Exchange.) 

There  is  practically  no  difference  between  a  bill  of  exchange 
and  a  draft,  but  the  term  bill  of  exchange  is  commonly  applied 
to  an  order  for  payment  of  money  in  a  foreign  country. 

A  drawer  of  a  bill  of  exchange  is  primarily  liable  on  it  until 
it  is  accepted.  The  liability  of  the  indorsers  follows  in  the 
order  in  which  they  appear  on  the  bill.  After  a  bill  of  exchange 
is  accepted  the  acceptor  becomes  the  person  v;ho  is  liable  and 
the  drawer  and  indorsers'  liability  follow  in  their  order.  The 
holder  of  a  bill  of  exchange  may,  in  the  event  of  non-payment, 
proceed  against  the  drawer,  acceptor  or  indorsers,  irrespective 
of  their  liability  or  the  order  in  which  their  names  appear  on 
the  paper. 

The  drawer  of  a  bill  of  exchange  guarantees  to  the  indorsers 
or  holder  that  the  drawee  will  accept  and  pay  same,  and  in  the 


TERMS  AND  EXPRESSIONS  181 

event  the  drawee  does  not  pay,  the  drawer  warrants  to  do  so 
providing  the  bill  is  properly  presented  and  protested. 

It  is  the  duty  of  a  holder  of  a  bill  of  exchange  to  promptly 
forward  same  for  acceptance  by  the  drawee  and  after  its  accept- 
ance to  have  same  duly  presented  for  payment.  If  drawee 
refuses  to  accept  the  bill  or  refuses  to  pay  after  acceptance, 
the  drawer  and  indorsers  must  at  once  be  notified  of  the  fact 
and  the  bill  duly  protested,  otherwise  the  drawer  and  indorsers 
will  be  released  from  liability. 

It  is  not  unusual  in  the  drawing  of  bills  of  exchange  in 
sets  for  the  drawer  or  purchaser  to  send  the  first  of  exchange 
(original)  to  the  point  upon  which  drawn  for  acceptance  and 
to  sell  the  second  of  exchange  (duplicate)  upon  the  market,  thus 
putting  same  into  circulation.  This  second  of  exchange  will 
bear  the  name  and  address  of  the  party  holding  the  first  or 
accepted  bill,  but  before  payment  in  such  cases,  the  first  and 
second  are  attached,  thus  becoming  one  bill.  The  reason 
for  sending  the  first  of  exchange  in  advance  for  acceptance 
is  to  shorten  the  running  time  of  the  bill,  since  the  30,  60  or  90 
days,  as  the  case  may  be,  which  the  bill  has  to  run  before  it 
is  due,  does  not  commence  until  it  is  presented  to  payee  for 
acceptance.  In  selling  the  second  of  exchange  a  higher  price 
can  be  commanded  if  the  first  has  been  forwarded  for  accept- 
ance a  week  previously.  But  ordinarily,  the  original  is  mailed 
at  once,  the  duplicate  by  next  steamer,  and  the  triplicate,  if 
any,  is  held  by  the  purchaser.  The  object  of  sending  the 
duplicate  by  mail  by  a  different  steamer  is  to  avoid  delay  in 
payment  in  case  original  is  lost.  A  bank  may  pay  either  the 
original,  duplicate  or  triplicate  of  a  bill  of  exchange  if  the  others 
have  not  been  presented  and  paid.  A  bill  of  exchange  may 
be  PAID  any  number  of  times  before  it  is  due  and  be  put  into 
circulation  between  each  payment,  but  once  it  is  paid  by  the 
ACCEPTOR  on  its  becoming  due,  it  cannot  again  be  put  into 
circulation,  nor  can  any  action  be  brought  upon  it. 

CONTINENTAL  EXCHANGE.  Continental  exchange  or  a 
continental  bill  is  one  payable  on  the  continent  of  Europe,  or 
elsewhere  in  Europe  than  Great  Britain. 

CURRENCY  OF  A  BILL.  Means  the  time  between  date  of 
acceptance  and  the  date  it  is  due  and  payable. 

D-A  and  D-P  are  abbreviations  used  to  signify  the  words 
"Documents  for  Acceptance"  and  "Documents  for  Payment." 

In  drawing  time  drafts  against  shipments  exported  (see 
Commercial  Bills  of  Exchange)  and  the  same  are  accompanied 
by  bills  of  lading,  it  is  customary,  when  not  drawn  direct  upon 
bank  or  bankers,  to  instruct  as  to  whether  the  bill  of  lading 
shall  be  delivered  at  time  the  draft  is  accepted  (see  Acceptance), 
or  if  payment  of  draft  be  required  before  delivery  of  bill  of 
lading.  If  the  former,  the  term  "  documents  for  acceptance  "  is 


182  FOREIGN  EXCHANGE  TEXT  BOOK 

used;  and  if  the  latter,  documents  for  payment.  Where  drafts 
are  drawn  direct  on  bankers,  it  is  understood  the  documents 
(bill  of  lading,  insurance  certificate  and  sometimes  weight 
certificate)  may  be  delivered  upon  acceptance  of  draft. 

DEMAND  EXCHANGE.  Drafts,  checks  or  other  negotiable 
paper  drawn  payable  at  sight  or  on  demand  by  bank  upon 
which  drawn. 

DIRECT  AND  INDIRECT  EXCHANGE.  Drafts  or  other  nego- 
tiable paper  drawn  with  the  intention  that  they  shall  be  pre- 
sented only  at  the  particular  place  upon  which  drawn,  would  be 
termed  direct  exchange.  If  a  check  were,  for  example,  drawn 
payable  at  London  but  remitted  to  a  payee  at  Liverpool  for 
use  by  him  there,  it  would  be  termed  indirect  exchange. 

It  is  a  common  practice,  though  not  always  desirable,  to 
draw  checks  and  drafts  payable  at  principal  trade  centers  such 
as  London,  Paris,  Berlin,  Vienna,  etc.,  which  are  intended  for 
payment  at  interior  places  in  the  various  countries.  This  is 
generally  due  to  the  fact  that  the  bank  or  institution  issuing 
same  have  no  arrangement  for  payment  of  the  paper  at  the 
place  to  which  it  is  to  be  sent,  but  expects  the  payee  to  nego- 
tiate same  with  some  local  bank  to  best  advantage.  There  are 
also  instances  where  a  check  or  draft  can  be  negotiated  to 
better  advantage  if  drawn  payable  at  a  principal  trade  center 
instead  of  upon  a  bank  at  point  to  which  remitted.  Such  cases 
would  be  called  indirect  exchange. 

DOLLAR  EXCHANGE.  Means  drafts,  checks,  etc.,  drawn  for 
an  amount  expressed  in  United  States  dollars. 

DOMESTIC  EXCHANGE.  Means  drafts,  checks  or  other 
exchange  drawn  payable  within  the  country  in  which  issued — 
sometimes  called  inland  exchange.  Domestic  exchange  is 
calculated  in  only  one  kind  of  money,  while  foreign  exchange 
is  calculated  in  two  kinds  of  money  at  least. 

DOMICILED.  A  term  used  to  signify  a  certain  place  at 
which  a  draft,  check,  bill  of  exchange,  etc.,  is  made  payable; 
that  is,  if  made  payable  at  a  certain  place  it  is  domiciled  at 
that  place. 

DRAFT.  A  written  order  to  pay  at  sight  (on  presentation) 
or  at  some  future  fixed  time  (after  sight)  a  specified  sum.  The 
one  who  issued  or  signs  the  draft  is  termed  the  drawer,  the  one 
to  whom  it  is  addressed  is  termed  the  drawee.  A  draft  is 
generally  payable  or  collectable  through  a  bank  or  other  finan- 
cial agency.  Unlike  a  check,  which  is  drawn  upon  a  bank  in 
which  the  drawer  has  funds  to  his  credit,  a  draft  may  be  drawn 
for  the  collection  of  an  account  due  the  drawer,  or  against  the 
value  of  goods  sold  to  the  drawee,  which  have  been  received 
or  are  to  arrive  at  some  future  date. 

A  draft  may  be  drawn  payable  to  bearer  or  to  the  order 
of  a  person  at  sight  (on  presentation).  If  drawn  payable  after 


TERMS  AND  EXPRESSTON«  183 

sight  it  is  customary  to  present  draft  to  the  drawee  at  earliest 
possible  moment  for  acceptance,  since  the  running  time  of 
the  draft  dates  from  the  time  it  is  accepted,  and  not  from  date 
of  draft. 

A  draft  is  dependent  for  its  payment  upon  its  acceptance 
by  the  drawee  or  one  upon  whom  it  is  drawn,  and  if  the  drawee 
refuses  to  accept  same,  or  does  not  pay  it  when  due,  no  criminal 
proceeding  can  be  instituted  against  drawer. 

When  acceptance  of  a  time  draft  is  refused  it  is  customary 
to  protest  same  (see  Protest).  A  draft  is  a  piece  of  paper 
representing  not  money  but  a  credit  or  value  of  the  drawer  in 
the  hands  of  the  drawee  and  is  of  little  value  to  the  drawer 
unless  accepted  by  drawee. 

There  is  practically  no  difference  between  a  draft  and  a 
bill  of  exchange,  although  the  term  draft  is  commonly  applied 
to  an  order  for  money  payable  within  the  United  States,  while 
the  term  bill  of  exchange  is  applied  to  an  order  for  money 
payable  in  a  foreign  country. 

After  a  draft  is  accepted  it  becomes  practically  a  promise  to 
pay  on  the  part  of  the  acceptor  and  he  can  be  held  thereon  as 
on  a  note. 

The  word  draft  is  frequently  applied  to  checks  as  well  as 
bills  of  exchange. 

FIRST,  SECOND  AND  THIRD  OF  EXCHANGE.  It  is  customary 
in  drawing  drafts  for  the  value  of  goods  exported  to  issue  the 
drafts  in  duplicate,  and  sometimes  in  triplicate.  One  of  the 
drafts  is  called  the  first  of  exchange  or  original;  the  other  the 
second  of  exchange  or  duplicate;  and  the  third,  if  issued,  the 
third  of  exchange  or  triplicate.  The  object  of  drawing  drafts 
on  foreign  countries  in  duplicate  or  triplicate  is  to  mail  the 
first  on  the  first  outgoing  steamer  and  the  second  on  the  following 
or  a  different  steamer,  so  that  if  one  is  lost  or  delayed  the  other 
will  serve  the  purpose,  as  whichever  is  first  presented  will  be 
paid.  If  a  third  is  issued,  it  is  usually  held  as  a  memorandum. 
The  payment  of  any  one  of  the  three  bills  cancels  the  others. 

When  drafts  or  bills  of  exchange  are  drawn  in  sets  they 
are  marked  or  printed  as  follows:  First  of  exchange  (second 
and  third  unpaid) ;  second  of  exchange  (first  and  third  unpaid) ; 
third  of  exchange  (first  and  second  unpaid).  Or  in  this  manner: 
Original  (duplicate  and  triplicate  unpaid);  duplicate  (original 
and  triplicate  unpaid);  triplicate  (original  and  duplicate 
unpaid). 

GOLD  EXPORTING  AND  IMPORTING  POINTS.  When  the 
rates  for  drafts,  checks  or  bills  of  exchange  on  foreign  countries 
are  so  high  or  so  low  that  gold  can  be  exported  or  imported 
equally  cheap,  foreign  exchange  is  said  to  have  reached  the 
gold  exporting  or  the  gold  importing  point. 

The  term  specie  point  is  sometimes  used  instead  of  gold 


184  FOREIGN  EXCHANGE  TEXT  BOOK 

point,  but  the  term  gold  point  is  most  commonly  employed 
because,  strictly  speaking,  specie  means  any  kind  of  metal 
money,  while  there  is  but  one  meaning  'to  gold. 

Under  normal  conditions  the  rates  for  foreign  exchange 
fluctuate  between  what  are  termed  gold  exporting  and  gold 
importing  points,  which  means  the  actual  cost  of  the  gold  plus 
the  cost  of  transporting  it  from  one  point  to  another.  For 
example:  If  you  wish  to  remit,  say  to  London,  the  equivalent 
of  £50,000  (or  approximately  $250,000)  and  you  found  that 
the  cost  of  the  gold  coin  or  bullion  and  the  expense  of  freight 
charges,  insurance,  commission,  etc.,  would  be  considerably 
less  than  the  cost  of  a  draft  or  check  for  the  amount  on  London, 
then  you  would  ship  gold  in  preference.  If,  however,  the  cost 
were  equal  or  greater  for  shipping  gold,  then  you  would  remit 
by  check,  as  it  would  be  more  convenient  and  attended  with 
less  risk. 

When  the  rate  for  demand  sterling  exchange  gets  doAvn 
to,  say,  $4.83f  to  $4.84  per  pound,  a  person  here  desiring  to 
obtain  a  large  sum  of  money  from  London  would  find  it  more 
profitable  to  have  the  debtor  ship  gold  to  America  at  his  expense, 
as  the  gold  would  bring  him  more  money.  This  would  be 
the  gold  importing  point.  When  such  exchange  reaches, 
however,  as  high  as  $4.89  to  $4.89^  per  pound,  then  gold  can 
be  exported  equally  cheap.  This  would  be  the  gold  exporting 
point. 

IN  CASE  OF  NEED.  An  expression  frequently  written  or 
stamped  on  drafts  drawn  against  exportations  to  foreign  coun- 
tries, which  is  intended  as  a  notice  to  bankers  or  others  abroad, 
through  whose  hands  the  draft  may  pass,  that  they  must  not 
protest  draft  for  non-acceptance  or  non-payment;  that  in 
case  of  need,  that  is,  in  case  it  is  not  accepted  upon  presenta- 
tion to  drawee  or  paid  at  maturity,  the  holder  must  call  upon 
a  certain  bank,  banker  or  person  (usually  agent  of  the  drawer) 
designated  for  reimbursement.  The  expression  is  usually 
used,  for  example,  in  this  way:  "In  case  of  need  with  Dresdner 
Bank,  Berlin,  Ger."  The  use  of  the  expression  is  to  avoid 
exorbitant  protest  fees. 

MATURITY.  The  time  fixed  for  the  payment  of  a  draft  or 
bill  of  exchange,  or,  in  other  words,  when  it  is  due  to  be  paid. 
A  draft  drawn,  payable,  at,  say,  60  days  after  sight,  would 
mature  60  days  after  the  draft  was  accepted  by  the  drawee. 
If  drawn  payable  10  days  after  date  the  draft  would  mature 
at  the  expiration  of  10  days.  In  most  countries  a  certain 
number  of  days  grace  (usually  three)  is  allowed  by  law.  Where 
so  allowed  payment  cannot  be  exacted  until  expiration  of  the 
period  for  which  draft  is  drawn  plus  the  number  of  days  grace. 

No  PROTEST.  A  term  frequently  used  on  drafts  or  other 
paper  sent  for  collection  to  indicate  that  the  paper  must  not 


TERMS  AND  EXPRESSIONS  185 

be  protested  (see  Protest)  if  not  paid  or  accepted,  and  is,  there- 
fore, not  subject  to  protest  fees  usually  charged  by  banks  or 
collection  agencies.  When  no  instructions  are  given  as  to 
protesting  it  is  customary  for  banks  to  protest  same  according 
to  legal  requirements,  for  which  service  a  fee  of  about  $2.50 
is  exacted,  and  must  be  paid  by  the  sender  of  the  collection. 
Where  drafts,  notes  and  other  papers  for  collection  have  words 
"no  protest"  thereon,  it  is  a  notice  that  the  expense  for  pro- 
testing shall  not  be  incurred. 

NOTIXG.  Is  evidence  in  writing  by  a  notary  that  presenta- 
tion of  a  bill  of  exchange  for  acceptance  or  payment  was  made 
to  drawee.  This  act  reserves  the  formal  protest  act  in  due 
course  of  time. 

PER  MILLE.  This  means  per  1,000.  The  term  is  in  general 
use  abroad  and  not  infrequently  in  this  country  in  connection 
with  foreign  exchange  transactions.  It  is  often  applied  to 
premium  and  discount.  For  example:  A  premium  of  one 
per  mill  would  mean  one  for  each  thousand,  equivalent  to 
1-10  of  1  per  cent.  In  saying  that  the  premium  for  gold 
in  France  is  one  per  mille  (French)  it  would  mean  one  franc 
on  each  1,000  francs.  In  speaking  of  the  cost  of  revenue  stamps, 
which  have  to  be  affixed  to  time  drafts  or  bills  of  exchange 
in  Germany,  we  say  one-half  per  mill,  which  means  one-half 
murk  (50  pfennigs)  on  each  1,000  marks.  If  a  bank  in  Ger- 
many were  to  charge  a  premium  of  one  per  mill,  it  would  be 
one  mark  on  each  1,000  marks,  or  1-10  of  1  per  cent. 

PROTEST.  In  McMaster's  "Irregular  and  Regular  Com- 
mercial Paper,"  published  by  the  McMaster  Co.,  69  Wall  St., 
New  York  City,  the  following  is  given  under  head  of  "Protest:" 

"The  protesting  of  a  dishonored  instrument — an  act  which  is  per- 
formed by  a  notary  public,  but  which  under  certain  circumstances  can  be 
performed  by  another  person — is  an  act  done  to  prevent  the  release  of 
the  indorsers  of  all  negotiable  instruments  and  also  the  drawers  of  bills 
of  exchange  and  checks,  as  such  parties  are  discharged  if  the  instrument 
is  not  protested  when  protest  is  required. 

"On  the  day  of  maturity  of  all  negotiable  instruments,  and  on  the 
day  when  a  bill  of  exchange  should  be  presented  for  acceptance,  the 
notary,  with  the  instrument  in  his  possession,  must  present  it  at  the 
place  where  it  is  drawn  payable,  and  demand  acceptance  or  payment,  as 
the  case  may  be,  and  on  failure  to  receive  acceptance  or  payment  thereon, 
he  is  required  to  notify,  by  mail  or  in  person,  the  indorsers  and  drawers 
of  the  demand  and  non-payment,  and  formally  protest  the  instrument. 

"If  no  place  of  payment  is  mentioned  in  the  instrument  it  must  be 
presented  to  the  place  of  business  of  the  person  required  to  pay — the 
drawee  of  the  bill  or  the  maker  of  the  note — and  if  there  is  no  such 
place  of  business,  then  at  his  residence.  If  the  instrument  is  lost  it  can 
be  presented  and  protested  by  copy  or  description.  The  demand  should 
be  made  personally  of  the  party  required  to  pay  or  accept,  and  if  he  be  not 
present,  then  of  some  person  in  charge  of  the  office  or  premises.  If  no 
person  is  present  the  demand  can  be  made  of  'whom  it  may  concern.'  " 

"The  notary  must  then,  that  day,  note  on  the  instrument  the  fact 
that  on  that  date  he  had  protested  the  instrument  for  non-acceptance  or 


186  FOREIGN  EXCHANGE  TEXT  BOOK 

non-payment,  as  the  case  may  be.  Then  and  in  any  case  not  later  than 
during  business  hours  of  the  next  day,  or  not  later  than  the  last  outgoing 
mail  of  such  day,  notice  of  demand,  non-acceptance  or  non-payment 
and  of  protest  must  be  mailed  to  each  of  the  parties  to  the  instrument. 
If  affixed  to  any  name  is  a  postoffice  address,  the  notice  must  be  mailed, 
postpaid,  to  that  address.  If  no  such  address  is  given,  then  inquiry 
must  be  made  as  to  the  business  place  or  residence  of  the  parties  and  the 
notice  sent  there.  If  no  address  can  be  found,  a  notice  for  such  party 
or  parties  must  be  mailed  to  the  owner  or  last  indorser.  Where  there  is 
doubt  as  to  the  postoffice  address  of  a  party,  it  is  customary,  as  a  pre- 
cautionary measure,  to  mail  several  notices  to  different  places  or  enclosed 
to  different  persons.  If  any  of  the  parties  are  dead,  inquiry  must  be  made 
as  to  their  personal  representatives  and  notice  be  sent  to  such  representa- 
tives, and  if  no  personal  representative  be  found,  notice  must  be  sent 
to  the  last  residence  or  place  of  business  of  the  deceased. 

"There  is  no  particular  form  of  notice  required;  it  is  only  necessary 
that  it  conveys  information  sufficient  to  acquaint  the  party  of  the  demand 
and  non-payment  of  the  particular  instrument.  It  will  be  sufficient  to 
have  the  notice  read,  for  instance: 

CANISTEO,  N.  Y.,  Sept.  1,  1902. 
"N.  C.  TAYLOR, 

Canisteo,  N.  Y. 

Please  take  notice  that  a  promisory  note  made  by  Tillotson 
&  Vorhis,  dated  July  1,  1902,  due  this  day,  for  one  thousand 
dollars,  and  indorsed  by  you,  has  this  day  been  protested  for 
non-payment,  and  that  the  holders  look  to  you  for  payment 
thereof,  payment  of  the  same  having  been  duly  demanded  and 
refused. 

JOHN  D.  MOORE, 

Notary  Public. 

"Notice  of  protest  can  be  delivered  personally,  and  oral  notice  may 
be  sufficient. 

"At  any  subsequent  time  the  notary  issues  a  certificate  of  protest, 
under  his  hand  and  seal,  to  which  is  attached  the  instrument  or  a  copy 
thereof,  or  both. 

"The  certificate  must  specify  the  time  and  place  of  presentment,  the 
fact  of  presentment  and  the  manner  thereof,  the  cause  or  reason  for 
protesting  the  bill,  the  demand  made  and  the  answer  given,  if  any,  or 
the  fact  that  the  drawee  or  acceptor  could  not  be  found. 

"Protest  may  be  made  by:  A  notary  public,  or  by  any  respectable 
resident  of  the  place  where  the  bill  is  dishonored,  in  the  presence  of  two 
or  more  credible  witnesses." 

REBATE  RATES.  A  term  used  in  connection  with  docu- 
mentary commercial  bills  of  exchange  and  means. the  rate  per 
cent  that  will  be  rebated  or  allowed  if  the  draft  or  bill  is  paid 
before  maturity  or  before  due.  For  example,  if  a  sixty-day 
draft  drawn  against  commodities  exported  wyere  paid  by  the 
drawee  abroad,  say,  thirty  days  after  the  draft  wras  accepted, 
the  drawee  would  be  entitled  to  a  rebate  from  face  amount  of 
draft,  at  the  prevailing  rate  per  cent  applicable  to  such  bills 
for  a  period  of  thirty  days. 

Rebate  rates  apply  only  to  time  commercial  bills  of  exchange 
drawn  on  firms  where  documents  are  for  payment;  that  is, 
where  bill  of  lading  is  delivered  only  upon  payment  of  the 
draft. 


TERMS  AND  EXPRESSIONS  187 

SELLING  RATES.  The  rate  at  which  foreign  exchange  is 
sold  by  dealers  in  foreign  exchange. 

SHORT  BILLS.  A  term  usually  applied  to  foreign  bills  of 
exchange  which  are  drawn  payable  thirty  days  or  less  after  sight 
or  acceptance.  The  term  "short  dated  bills"  is  sometimes  used. 

SIGHT  BILLS.  Or  SIGHT  CHECKS,  or  SIGHT  DRAFTS,  mean 
those  payable  at  sight,  on  demand  or  on  presentation. 

STERLING  EXCHANGE.  Means  drafts,  checks  or  bills  of 
exchange  drawn  in  the  money  of  Great  Britain — pounds  sterling. 

USUANCE.  The  time  which  is  allowed  by  custom  or  usage 
for  the  payment  of  bills  of  exchange  drawn  on  a  distant  country. 
The  length  of  the  usuance  varies  in  different  places,  from  four- 
teen days  to  six  months  after  the  date  of  the  bill,  and  the  bills 
may  be  drawn  at  usuance,  half-usuance,  double  usuance,  etc. 
In  recent  years  a  four-months'  usuance  has  been  established 
for  India,  China  and  Japan. 

WITH  EXCHANGE.  When  the  words  "with  exchange"  are 
endorsed  on  a  draft  for  collection,  or  are  appended  thereto, 
it  means  that  whatever  charge  there  is  for  converting  the  money 
into  a  foreign  money  or  the  collecting  of  same,  shall  be  borne 
by.  the  drawee.  In  other  words,  the  full  face  amount  of  draft 
plus  the  cost  of  exchange,  must  be  paid  by  the  drawee  (one 
upon  whom  drawn). 

In  drawing  drafts  upon  South  American  points  where 
exorbitant  charges  are  usually  exacted  by  banks  for  collecting, 
it  is  customary  to  draw  such  drafts  "with  exchange,"  thus 
requiring  the  drawee  to  pay  the  cost  of  exchange  between  the 
country  in  which  the  draft  is  paid  and  the  country  to  which  the 
proceeds  of  the  draft  have  to  be  remitted. 

In  the  purchase  of  commercial  bills  of  exchange  drawn 
against  commodities  exported  to  remote  countries  where  bank- 
ing facilities  are  not  very  good  it  makes  a  great  difference  in 
net  proceeds  realized  whether  the  drafts  are  drawn  with  exchange 
or  not.  , 

WITHOUT  RECOURSE.  The  words  "without  recourse"  written 
before  an  indorsement  on  the  back  of  a  note,  check,  draft  or 
bill  of  exchange,  absolves  the  person^so  signing  from  any  legal 
process  by  the  holder  in  case  payment  at  maturity  is  not  made. 
In  other  words,  the  indorser  is  a  mere  assignor  of  the  title  to 
the  paper,  and  is  relieved  from  responsibility  for  its  payment. 
Indorsements,  without  recourse,  are  frequently  made  merely 
for  purposes  of  identification  of  payee  or  genuineness  of  previous 
indorsements. 

INDORSEMENTS. 

An  indorsement  is  anything  written  on  a  note,  draft, 
check,  bill  of  exchange  or  other  negotiable  commercial  paper, 
pertaining  to  the  payment  thereof.  The  indorser  is  one  who 


188  FOREIGN  EXCHANGE  TEXT  BOOK 

makes  the  indorsement  by  writing  his  name,  usually  on  back 
of  the  instrument.  The  following  are  the  principal  forms  of 
indorsement: 

IN  BLANK.  Where  the  indorser  writes  his  name  only, 
without  making  it  payable  to  anyone  or  naming  conditions 
of  payment  or  making  other  notations.  For  example:  S.  S. 
JONES. 

IN  FULL.  When  indorsed  payable  to  some  particular 
person  or  persons  and  thus  limiting  payment  to  such  persons. 
For  example:  Pay  to  the  order  of  Brown,  Smith  &  Co.  S.  S. 
JONES. 

XOTE. — This  form  of  indorsement  is  generally  adopted  as  being 
safest,  since  if  paper  is  lost  or  stolen  the  holder  could  not  negotiate  same 
without  securing  indorsement  of  the  payees,  Brown,  Smith  &  Co. 

QUALIFIED  INDORSEMENT.  Is  one  which  is  intended  to 
release  the  indorser  from  all  responsibility  in  relation  to  pay- 
ment. For  example:  Pay  to  the  order  of  Brown,  Smith  &  Co., 
without  recourse  to  me.  S.  S.  JONES. 

The  words  "to  me"  are  sometimes  omitted. 

NOTE. — Qualified  indorsements  are  also  used  to  LIMIT  the  liability 
of  the  indorser,  as  for  example,  when  the  words  "Agent,"  "Cashier," 
"Secretary,"  "Treasurer,"  etc.,  arc  placed  after  the  signature.  The 
use  of  these  titles  limits  the  responsibility  Of  the  indorser  to  that  pertain- 
ing to  his  official  position. 

RESTRICTIVE  INDORSEMENTS.  Are  intended  to  restrict 
payment  to  person  or  persons  to  whom  made  payable  and  to 
also  stop  further  negotiation  or  transfer  of  the  paper.  For 
example:  Pay  to  Brown,  Smith  &  Co.,  only.  S.  S.  JONES. 

XOTE. — If  paper  is  sent  for  collection  and  credit,  indorsements  would 
be  made  thus: 

Pay  to  First  National  Bank  for  my  account.     S.  S.  JONES. 

CONDITIONAL  INDORSEMENTS.  Those  naming  certain  con- 
ditions to  be  complied  with  before  payment  is  made  to  holder. 
For  example:  Pay  to  Brown,  Smith  &  Co.  upon  delivery  of 
10  shares  U.  P.  stock.  S.  S.  JONES. 

WAIVING  PROTEST.  Where  the  indorser  waves  protest 
and  thus  remains  responsible  to  the  holder  of  the  paper,  without 
receiving  notice  of  protest  in  event  of  non-payment.  For 
example:  Protest  and  notice  of  protest  waived.  S.  S.  JONES. 

XOTE. — When  paper  is  sent  for  collection  and  it  is  not  desired  to 
have  same  protested  in  event  of  non-payment  when  due,  the  words  "no 
protest"  are  usually  indorsed  thereon. 

REMARKS.  Your  name  should  always  be  indorsed  on 
back  of  drafts,  checks,  notes,  bills,  etc.,  just  as  the  same  appears 
on  the  face  of  the  paper;  that  is,  if  wrongly  spelled  on  face, 
it  should  be  indorsed  just  the  same  on  the  back,  but  in  addition 
you  should  correctly  indorse  your  name  underneath. 


CHAPTER  XL 

BUYING   FOREIGN   COMMERCIAL  BILLS 
OF  EXCHANGE. 

The  b'uying  of  foreign  commercial  bills  of  exchange  is  the 
principal  medium  of  bankers  and  foreign  exchange  dealers  in 
placing  funds  to  their  credit  in  banks  abroad,  against  which 
they  issue  checks,  drafts,  letters  of  credit,  etc.  It  is  the  founda- 
tion of  most  of  our  foreign  exchange  transactions.  It  is  the 
principal  source  of  profit  in  the  business.  It  enables  manufac- 
turers to  sell  their  goods  abroad  for  cash  in  advance. 

The  buying  of  commercial  bills  of  exchange  can  not  be 
safely  undertaken  except  by  those  thoroughly  familiar  with 
that  business.  It  is  practically  equivalent  to  loaning  money 
upon  securities  you  have  not  seen.  If  the  drawer  of  the  bill 
has  unquestionable  responsibility,  that  of  course  eliminates 
the  principal  risk  of  loss;  but  if  great  care  is  not  exercised  in 
examining  bills  purchased,  a  slight  imperfection  or  error  might 
cause  a  long  delay  in  adjusting  the  mistake,  thereby  causing 
loss  of  interest.  If  through  a  misunderstanding,  or  for  other 
cause,  goods  are  not  accepted,  they  have  to  be  sold  to  best 
advantage  for  account  of  owner  of  the  bill,  and  proceeds  of 
sale  are  applied  toward  payment  of  the  draft.  If  there  is  a 
deficiency  it  is  collected  of  the  drawer  of  the  bill,  the  exporter. 

The  buyers  of  commercial  bills  should  know  the  market 
value  of  the  goods  exported;  the  financial  standing  of  the 
drawer  or  exporter;  should  see  that  the  bills  of  lading  are 
correctly  dated,  correspond  with  shipments  made;  are  duly 
signed  by  agent  or  proper  official  of  railway  or  freight  line; 
that  they  correspond  with  the  insurance  certificates  in  the 
various  particulars;  that  if  more  than  two  copies  were  issued, 
you  have  them  all;  that  there  are  no  printed  or  stamped  con- 
ditions thereon  that  would  be  likely  to  render  them  valueless 
under  possible  emergencies.  If  goods  are  perishable,  see  that 
they  are  routed  by  fast  freight  lines  and  fast  steamers.  If  bill 
of  lading  only  covers  shipment  to  the  seaport,  as  is  sometimes 
the  case  where  goods  are  shipped  from  some  small  inland  place 
where  through  bills  of  lading  are  unobtainable,  arrangements 
must  be  made  through  your  own  agent  to  have  same  exchanged 
for  ocean  bill  of  -lading  at  the  seaport.  Any  error  or  incom- 
pleteness of  the  documents  will  cause  delay  in  payment,  or 
expense  for  cablegrams  to  adjust  them. 

Foreign  commercial  bills  of  exchange  vary  as  to  conditions 
of  payment  abroad.  If  conditions  of  sale  between  buyer  and 

189 


190  FOREIGN  EXCHANGE  TEXT  BOOK 

seller  were  that  the  goods  were  to  be  paid  for  upon  delivery,  the 
instructions  accompanying  the  bill  would  say,  DOCUMENTS  FOR 
PAYMENT,  meaning  not  to  deliver  bill  of  lading  (which  would 
enable  drawee  to  get  goods)  until  draft  had  been  paid.  If 
instructions  read,  DOCUMENTS  FOR  ACCEPTANCE,  it  would  mean 
bill  of  lading  could  be  delivered  when  draft  was  ACCEPTED, 
thus  enabling  drawee  to  obtain  goods  at  once,  and  pay  draft 
any  time  before  maturity.  (See  page  171.) 

It  is  the  custom  of  large  buyers  of  commercial  bills  of 
exchange  to  exact  of  exporters  what  is  termed  a  HYPOTHECA- 
TION CERTIFICATE.  This  certificate,  after  describing  the  nature 
of  the  shipment  and  the  documents  in  question,  states  in  effect, 
that  the  bill  of  lading  is  lodged  as  collateral  security  for  the 
acceptance  and  payment  of  the  draft;  that,  in  case  the  drawee 
declines  to  accept  draft  or  it  is  not  paid  at  maturity,  the  owner 
of  the  bill  is  authorized  to  place  the  property  described  in  the 
hands  of  brokers  for  sale  for  account  of  whom  it  may  concern, 
and  apply  proceeds  toward  payment  of  draft  and  expenses 
incurred;  and  that  in  case  of  a  deficiency  the  seller  (drawer) 
agrees  to  pay  amount  on  demand.  Sometimes  exporters  give 
a  general  hypothecation  certificate,  to  apply  to  any  and  all 
bills  of  exchange  purchased  of  them.  (See  page  210.) 

CERTIFICATE  OF  INSURANCE  on  shipments  exported  are 
usually  for  a  sum  from  10  to  20  per  cent  in  excess  of  the  stated 
value  of  the  goods.  They  should  be  carefully  examined  to 
see  that  there  is  no  clause  which  would  render  insurance  void 
in  event  of  shipment  not  going  forward  within  a  specified  period 
or  that  it  would  expire  before  arriving  time  of  goods,  in  case 
of  delay,  or  by  reason  of  any  of  the  possible  emergencies  likely 
to  arise.  (See  page  170.) 

The  buyers  of  foreign  commercial  bills  of  exchange  must  be 
familiar  with  the  revenue  laws  and  commercial  customs  of  all 
the  foreign  countries  as  well  as  the  various  rates  of  discount  upon 
the  several  classes  of  paper,  as  they  change  from  day  to  day. 

What  are  known  as  REBATE  RATES  apply  only  to  time  com- 
mercial bills  of  exchange  drawn  on  firms  where  the  documents 
are  for  payment;  that  is,  where  bill  of  lading  is  delivered  only 
upon  payment  of  the  draft.  This  rebate  rate  is  an  allowance 
made  to  drawee  from  face  amount  of  draft,  if  paid  before 
maturity  or  before  due,  and  such  rebate  is  usually  1  per  cent 
below  the  Bank  of  England  official  minimum  discount  rate. 

THE  BANK  OF  ENGLAND  OFFICIAL  MINIMUM  DISCOUNT  RATE 
is  fixed  by  the  directors  of  the  Bank  of  England  at  their  meet- 
ing upon  Thursday  of  each  week;  and  their  decision  usually 
appears  in  the  financial  columns  of  our  daily  papers,  reading 
thus:  "Bank  of  England  minimum  discount  rate  unchanged;" 
or,  "Bank  of  England  increased  (or  reduced)  its  minimum  dis- 
count rate  to  3  per  cent/'  etc. 


BUYING  FOREIGN  COMMERCIAL  BILLS  OP  EXCHANGE  191 

The  PRIVATE  DISCOUNT  RATE  is  the  rate  at  which  PRIVATE 
banks — those  in  Great  Britain  other  than  the  Bank  of  England, 
those  in  Germany  other  than  the  Imperial  Reichsbank,  those 
in  France  other  than  the  Bank  of  France,  those  in  Holland 
other  than  the  Bank  of  the  Netherlands,  those  in  Italy  other 
than  the  Bank  of  Italy,  etc.,  etc.,  which  banks  act  in  the  capacity 
of  fiscal  agents  for  their  respective  Governments — will  discount 
bills  of  exchange  for  account  of  owners  or  last  indorsers;  and 
this  discount  is  governed  by  the  Government  banks'  discount 
rate,  and  also  by  the  supply  of  bills  in  the  market  for  discount. 

Foreign  commercial  bills  of  exchange  drawn  by  exporters 
without  documents  (bill  of  lading  and  insurance  certificate), 
known  as  clean  bills,  are  generally  upon  their  own  house  or 
branch  abroad,  and  are  against  funds  which  have  accumulated 
to  their  credit  from  payments  for  shipments  previously  made. 
Exporters,  before  selling  their  own  clean  bills  of  this  kind, 
generally  wait  until  the  rates  for  exchange  here  are  high.  Such 
bills  are  discountable  at  the  private  rate  of  discount. 

Documentary  commercial  bills  of  exchange  drawn  upon 
firms  in  Great  Britain,  where  DOCUMENTS  ARE  FOR  PAYMENT, 
can  not  be  discounted  upon  the  market  as  in  the  case  of  such 
bills  where  DOCUMENTS  ARE  FOR  ACCEPTANCE;  for  the  reason 
banks  abroad  to  whom  bills  are  sent  for  collection  will  not 
undertake  to  discount  commercial  bills  unless  they  are  what 
are  called  CLEAN  BILLS — that  is,  those  having  no  documents,  or 
bills  which  permit  of  the  documents  being  delivered  when 
drafts  are  accepted  by  drawee.  Commercial  bills  of  exchange 
drawn  upon  bankers  are  always  for  acceptance,  and  the  dis- 
count rate  applying  to  such  bills  is  the  PRIVATE  DISCOUNT  RATE 
of  the  day. 

CLEAN  BILLS  OF  EXCHANGE  are  those  having  no  bill  of 
lading  attached,  although  they  may  have  attached  the  insur- 
ance certificate  and  an  invoice  of  shipment.  If  these  clean 
bills  are  drawn  upon  firms  they  are  usually  subject  to  a  dis- 
count rate  of  £  of  I  per  cent  above  the  private  discount  rate  of 
the  day;  but,  if  drawn  upon  bankers,  they  will  be  discounted 
at  the  private  discount  rate. 

A  documentary  bill  of  exchange  (commercial  bill  of 
exchange)  accompanied  by  instructions  from  the  exporter  or 
drawer  to  deliver  documents  (bill  of  lading,  etc.)  only  upon 
payment  of  draft  by  the  importer  or  drawee,  which  is  drawrn 
upon  a  firm,  is  subject  to  a  discount  rate  of  1  per  cent  below 
the  Bank  of  England  official  minimum  discount  rate,  but  if 
the  instructions  are  to  deliver  documents  upon  acceptance  of 
drafts,  the  same  rate  of  discount  applies,  unless  the  drawee 
is  of  very  good  financial  standing,  in  which  case  the  bill  may 
be  discounted  by  the  holder  (bank)  at  \  of  1  per  cent  above 
the  PRIVATE  discount  rate  of  the  day. 


192  FOREIGN  EXCHANGE  TEXT  BOOK 

Bankers  and  financial  concerns  in  selling  commercial  bills 
of  exchange  (documentary)  sometimes  stamp  on  the  draft, 
"In  case  of  need,  with  the  National  Provincial  Bank  of  Eng- 
land," or  the  name  of  some  other  correspondent  bank. 

This  is  done  to  avoid  a  charge  by  intermediate  banks  for 
endorsing  or  protecting  drafts,  which  charge  is  frequently  very 
exorbitant.  When  so  stamped  it  is  a  notice  to  all  holders 
of  the  draft  they  may  call  upon  the  bank  named  if  draft  is 
not  promptly  accepted  or  honored,  for  relief,  therefore  there  is 
no  necessity  for  protesting,  since  the  bank  named  on  the  draft 
will,  by  previous  arrangement,  always  honor  such  drafts  and 
charge  to  account  of  bank  endorsing  such  notation  thereon. 

BANKERS'  REIMBURSE  BILL  is  where  the  drafts  are  drawn 
against  a  shipment  exported,  upon  a  banker,  the  documents 
being  for  acceptance.  When  buying  such  bills,  you  should 
keep  a  record  showing  names  of  endorsers  and  keep  close  wateh 
of  the  drawer  or  shipper  until  bill  is  paid.  The  shipper  should 
be  responsible  and  if  buying  a  considerable  amount  of  such 
bills  on  the  same  drawee,  you  should  ascertain  through  your 
correspondents  abroad  the  responsibility  of  the  drawee  and  be 
sure  you  do  not  buy  more  bills  against  a  single  drawee  than  his 
ordinary  business  requirements  would  indicate  he  needed. 

Foreign  Commercial  Bills  of  Exchange  are  divided  into 
two  classes,  namely,  commercial  bills,  which  are  drawn 
against  commodities  exported,  and  bankers'  bills  which  are 
drawn  by  bankers  against  balances  to  their  credit  abroad, 
which  may  have  resulted  from  the  payment  of  commercial  bills 
or  against  securities.  Commercial  bills  are  usually  drawn  pay- 
able at  sight,  or  3,  30,  60  or  90  days  after  sight,  while  bankers'  bills 
may  be  drawn  payable  in  60,  70  or  90  days,  or  on  demand  (sight) 
although  demand  bills  are  generally  termed  checks.  Cable 
transfers  are  also  made,  which  of  course  are  paid  immediately. 

There  are  times  when  GOLD  is  shipped  to  foreign  countries 
as  an  article  of  merchandise  by  reason  of  a  special  demand  for 
it.  Bankers'  bills  are  drawn  against  same  just  as  for  a  shipment 
of  goods;  BUT  such  cases  are  not  frequent,  and  drafts  would 
be  drawn  payable  in  the  shortest  time  possible  to  save  interest. 

In  buying  foreign  commercial  bills  of  exchange  it  is  neces- 
sary to  keep  advised  daily  of  the  market  rates  for  demand 
checks  on  foreign  cities  or  countries  and  also  the  rebate  and 
discount  rates  abroad,  both  of  which  fluctuate  according  to 
market  conditions,  the  former  nearly  every  day. 

In  buying  bills  on  countries  other  than  Great  Britain, 
France,  Germany  and  Holland,  and  especially  those  drawn  on 
other  than  the  principal  large  trade  centers,  it  is  necessary  to 
take  into  account  the  cost  of  having  bills  collected  by  bankers 
and  the  expense  of  having  the  funds  transferred  to  the  trade 
centers. 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  193 

It  is  customary  for  most  jobbers  and  large  dealers  in  foreign 
exchange  to  keep  credit  balances  in  London,  England;  Paris, 
France;  Berlin  and  Hamburg,  Germany;  and  Amsterdam, 
Holland,  upon  which  cities  the  demand  for  exchange  is  large 
as  compared  with  that  on  other  foreign  cities;  and  the  very 
large  jobbers  also  keep  balances  in  banks  at  Christiana,  Norway; 
Copenhagen,  Denmark;  St.  Petersburg  and  Warsaw,  Russia; 
Antwerp,  Belgium;  Zurich,  Switzerland;  Genoa  and  Rome, 
Italy;  Hong  Kong,  China;  Manilla,  Philippine  Islands;  Mexico 
City,  Mexico;  and  Yokohama,  Japan.  An  arrangement  is 
made  with  banks  at  these  points  for  a  fixed  charge  or  rate  per 
cent  for  collecting  commercial  bills  at  their  main  as  well  as 
branch  banks  at  interior  points,  which  charge  must  be  figured 
in  buying  commercial  bills.  The  class  of  goods  exported, 
against  which  the  commercial  bills  are  drawn,  also  cuts  quite 
a  figure  in  the  value  of  the  bills,  as  for  illustration:  Bills  against 
shipments  of  meat,  where  DOCUMENTS  ARE  FOR  PAYMENT,  com- 
mand a  higher  price  than  flour  bills,  because  meat,  being  perish- 
able, is  shipped  on  fast  steamers,  and  the  bills  are  discounted 
or  rebated  almost  immediately  upon  arrival  of  shipment,  it 
being  necessary  for  consignee  (drawee)  to  pay  draft  in  order 
to  obtain  the  bill  of  lading  with  which  to  obtain  goods; 
whereas  flour,  not  being  perishable,  is  usually  forwarded  on 
a  slow  steamer  to  secure  lower  freight  rates  and  very  often 
the  drawee  does  not  pay  the  draft  until  it  is  due,  perhaps 
30  or  60  days  after  acceptance,  thus  leaving  goods  in  ware- 
house. This,  of  course,  depends  upon  whether  the  consignee 
(drawee)  is  in  immediate  need  of  the  flour.  A  draft  drawn, 
say  60  days  after  sight,  would  mature  or  be  due  60  days 
from  the  date  it  was  accepted  by  drawee  abroad — not  60  days 
from  date  of  draft.  If  the  laws  of  the  country  allowed  days  of 
grace,  usually  three  days,  then  the  draft  would  be  due  in  63 
days  from  date  of  acceptance.  The  number  of  days  of  grace 
allowed  in  the  United  Kingdom,  3;  in  most  of  the  states  of  the 
United  States,  3;  in  South  America,  6  to  15;  in  Mexico,  24 
hours;  in  Russia,  36  hours  on  bills  payable  at  sight  and  10  days 
on  bills  drawn  payable  after  date. 

In  buying  commercial  bills  of  exchange,  the  rates  quoted 
are  always  so  much  per  pound  sterling  if  drawn  in  LEnglish 
money.  If  drawn  in  French  money,  the  rate  quoted  would  be 
the  number  of  francs  and  centimes  per  United  States  dollar, 
as  for  example:  Francs  5.15f,  meaning  they  would  pay  $1.00  for 
each  5  francs  15f  centimes.  If  drawn  in  German  money,  the 
rate  would  be  per  4  marks  (see  Chapter  IV,  "Quotations  on 
Foreign  Exchange.") 

PARTIES  TO  A  BILL  OF  EXCHANGE  AND  THEIR  RESPONSI- 
BILITY.— The  party  who  draws  the  bill  is  the  drawer. 
The  party  to  whom  the  order  to  pay  is  addressed  is  the  drawee, 


194  FOREIGX  EXCHANGE  TEXT  BOOK 

until  he  gives  his  assent  to  the  transaction  by  writing  his 
name  across  the  bill,  when  he  becomes  the  acceptor.  The 
party  to  whom  the  bill  is  made  payable  is  the  payee.  The 
drawer  and  the  payee  may  be  the  same  person.  When  any 
holder  of  a  bill  writes  his  name  on  the  back  of  the  bill  for  the 
purpose  of  transferring  his  interest  in  it  to  some  other  person 
he  is  the  indorser. 

The  drawee  upon  accepting  a  bill  (either  in  person  or  by 
his  authorized  agent)  becomes  primarily  liable  for  it,  but  if  he 
refuses  to  accept  it  when  presented  to  him,  or  cannot  pay  it 
when  due,  he  is  said  to  dishonor  it,  and  the  drawer  and  any 
of  the  indorsers  become  immediately  liable  to  the  holder  upon 
receiving  notice  from  the  holder  that  it  has  been  dishonored, 
accompanied  by  a  request  to  pay  the  amount. 

If  the  drawer  pay  the  amount,  then  the  indorsers  are 
discharged  from  their  liability  to  the  holder,  but,  if  the  last 
indorser  is  compelled  to  pay  the  amount  of  the  bill,  the  drawer 
and  those  indorsing  previous  to  the  holder  are  still  liable,  for 
the  last  indorser  can  sue  them  for  the  amount  he  has  paid  the 
holder  for  the  bill. 

There  is  considerable  competition  among  large  jobbers  of 
foreign  exchange  in  buying  foreign  commercial  bills  of  exchange, 
since  they  use  these  bills  to  place  funds  to  their  credit  abroad, 
against  which  they  sell,  at  wholesale  or  retail,  letters  of  credit, 
drafts,  checks,  etc.  Therefore  when  large  exporters  have  bills 
for  sale  they  call  upon  bankers. or  jobbers  for  bids,  which,  if 
not  limited,  would  apply  to  bills  of  any  amount.  The  jobber 
offering  the  highest  price  of  course  gete  the  bills.  It  is  not 
unusual  for  large  jobbers  to  buy  bills  to  the  value  of  S500.000 
in  a  single  day. 

To  give  examples  showing  the  process  by  which  the  value 
of  commercial  bills  of  exchange  of  all  classes  and  upon  all 
countries  are  determined  in  buying,  would  consume  too  much 
space,  therefore  we  shall  only  undertake  in  this  edition  to 
furnish  illustrations  for  the  purchase  of  bills  of  the  several 
classes  on  Great  Britain,  France,  Germany  and  Holland,  to 
\vhich  countries  over  62  per  cent  of  all  merchandise  exported 
from  the  United  States  is  consigned.  It  may  be  said,  how- 
ever, that  in.  the  purchase  of  bills  drawrn  upon  countries  other 
than  those  named  the  process  is  practically  the  same,  but  of 
course  ?,  different  rate  of  exchange  and  different  rate  of  interest, 
etc.,  would  apply. 

Buying  Bills  of  Exchange  on  Great  Britain. 

EXAMPLE  No.  1. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  London, 
England;  draft  drawn  payable  60  days  after  sight;  documents 
(bill  of  lading  and  insurance  certificate)  for  delivery  upon  pay- 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  195 

merit  of  draft;  Bank  of  England  minimum  discount  rate  on 
date  of  purchase,  4  per  cent;  market  rate  for  DEMAND  check 
on  London,  on  date  of  purchase,  $4.88  per  pound  sterling. 

OPERATION: 

Market  rate  for  demand  check  on  London $4 . 88 

Cost  per  pound  for  revenue  stamps  abroad 

(Is  per  £100) 0024 

Interest  per  pound,  63  days,  3%  (1%  below 

Bank  of  England  rate)  (see  table) 0251 

Profit,  1  cent  per  pound  (varies  according 

to  conditions) 01  . 0375 

Purchasing  price  per  pound  (or  say  $4.84£)  $4 . 8425 

NOTE. — The  item  of  profit  (1  cent  per  £)  is  used  merely  for  illustra- 
tion. It  is  customary  for  buyers  to  figure  from  £  to  2  cents  per  pound 
according  to  circumstances,  competition,  etc.  If  this  bill  had  been 
drawn  upon  some  other  city  in  Great  Britain  it  would  be  customary  to 
deduct  about  \  of  a  cent  per  £  additional  for  collection  and  cost  of  trans- 
ferring funds  to  London.  The  item  of  interest  is  taken  from  printed 
tables  figured  out  to  show  interest  per  single  pound  for  various  periods 
at  the  different  rates  per  cent.  (See  page  197.)  The  English  Government 
requires  that  revenue  stamps  to  the  value  of  1  shilling  per  £100  or  fraction 
thereof  be  affixed  at  time  of  acceptance  of  drafts  drawn  payable  at 
more  than  five  days  after  sight.  This  is  equivalent  to  1-20  of  1%  of  the 
rate  per  single  pound,  which  in  this  case  ($4.88  per  £)  would  be  .00244, 
but  for  convenience  $0.0024  per  £  is  generally  figured.  In  quoting  pur- 
chasing or  selling  price  for  a  bill  of  exchange,  draft  or  check,  it  is  ;>lways 
per  single  pound,  franc,  mark,  etc.,  as  the  case  may  be,  and  never  for  the 
total  amount  for  which  the  bill  is  drawn.  It  will  be  noted  that  the 
interest  or  discount  rate  used  in  this  example  is  1%  below  the  Bank  of 
England  minimum  discount  rate  (see  page  191)  which  always  applies 
where  documents  are  for  payment  instead  of  for  acceptance. 

EXAMPLE  No.  2. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  London; 
draft  drawn  payable  90  days  after  sight;  documents  for  delivery 
upon  acceptance  of  draft  by  drawee  abroad;  PRIVATE  rate  of 
discount  on  date  of  purchase,  2J%;  market  rate  for  demand 
check  on  London  on  day  of  purchase,  $4.88  per  pound. 
OPERATION: 

Market  rate  for  demand  check  on  London. . .  $4.88 

Cost  per  pound  for  revenue  stamp  abroad 

(Is  per  £100) 0024 

Interest,  93  days,  2i%  (private  rate) 0309 

Profit  1  cent  per  pound  (varies  according 

to  conditions) 01  .0433 

Purchasing  price  per  pound $4.8367 

NOTE. — Sterling  exchange  quotations  are  usually  raised  or  lowered 
either  by  eighths  of  a  cent  per  £  or  by  5-100  of  a  cent  per  £,  whichever 
is  nearest  to  figures,  therefore  the  purchasing  price  for  this  bill  would 


196  FOREIGN  EXCHANGE  TEXT  BOOK 

be  quoted  as  $4.8365  per  £.     Attention  is  directed  to  use  in  this  example 
of  the  PRIVATE  rate  of  discount  which  applies  in  all  cases  where  the 
documents  are  for  acceptance  instead  of  for  payment.     (See  page  191.) 
(See  also  note  under  Example  1.) 

EXAMPLE  No.  3. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  London; 
draft  drawn  payable  3  days  after  sight;  no  documents  attached; 
private  rate  of  discount  upon  date  purchased,  3%;  market 
rate  for  demand  check  on  London  on  date  of  purchase,  $4.88 
per  pound.  .  . 

OPERATION: 

Market  rate  for  demand  check  on  London $4 . 88 

Cost  per  pound  for  revenue  stamp  (1  penny) 

NOT  FIGURED 0000 

Interest  6  days  (3  days  grace),  3%  (private 

rate) * 0024 

Profit  1  cent  per  pound  (varies  according 

to  conditions) 01  .0124 

Purchasing  price  per  pound $4.8676 

This  rate  would  be  quoted  as  $4.86f  per  pound. 

NOTE. — Bills  of  this  class  are  known  as  clean  bills  by  reason  of  there 
being  no  documents.  (See  also  note  under  Example  1.) 

EXAMPLE  No.  4. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  London; 
draft  drawn  payable  10  days  after  sight:  documents  (bill  of 
lading,  etc.)  for  delivery  upon  acceptance  of  draft  by  drawee; 
private  rate  of  discount,  2  7-16%;  market  rate  for  demand 
check  on  London  on  date  of  purchase,  $4.88  per  pound. 
OPERATION: 

Market  rate  for  demand  check  on  London $4.88 

Cost  per  pound  for  revenue  stamps  (Is  per 

£100) 0024 

Interest  per  pound,  13  days  (3  days  grace) 

2  7-16%  (private  rate) 00421 

Profit  \  cent  per  pound  (varies  according 

to  conditions) 0025        .00911 

Purchasing  price  per  pound $4 . 87089 

Or  say  $4.87  per  pound.  (See  Note  under  Examples  1, 
2  and  3.) 

Stamp  Tax. 

The  stamp  tax  in  England  on  bills  of  exchange  above 
three  days'  sight  is  as  follows: 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE 


197 


Up  to  £5 1  penny 

£  5  to  £   10 2  pence. 

£  10  to  £  25 3  pence. 

£25  to  £  50 6  pence. 

£50  to  £  75 9  pence. 

£75  to  £100 • 1  shilling. 

over  £100 — 1  shilling  for  every  £100  or  fraction  thereof. 

In  figuring  English  bills  of  exchange  the  cost  of  revenue 
stamps  is  calculated  at  so  much  per  £100,  therefore,  as  the 
English  shilling  is  worth  24  3-10  cents  in  United  States 
money,  the  cost  per  pound  would  be  figured  as  .0024  cents  per 
pound,  or  nearly  £  cent. 

Sterling  Exchange  Interest  Table. 

Showing  interest  per  pound  sterling  for  use  in  purchasing 
bills  of  exchange  drawn  payable  3,  10,  30,  60,  70,  90  and  120 
days  after  sight. 

(Computed  at  $4.85  per  pound,  and  365  days  per  year, 
which  is  applicable  to  any  rate.) 

NOTE. — The  interest  for  a  given  number  of  days  per  pound  sterling 
at  a  given  rate  per  cent  is  determined  by  multiplying  the  rate  per  £  by 
the  rate  per  cent  and  dividing  the  result  by  the  number  of  days  in  u  year. 


Interest  or 
Discount  Rate 

3 

days 
sight 

10 
days 
sight 

33 
days 
sight 
(3  days 
grace) 

63 
days 
sight 
(3  days 
grace) 

73 

days 
sight 
(3  days 
grace) 

93 
days 
sight 
(3  days 
grace) 

123 
days 
sight 
(3  days 
grace) 

cents 

cents 

cents 

cents 

cents 

cents 

cents 

1-16  of  1%... 

.00002 

.00008 

.00027 

.00052 

.00061 

.00077 

.00102 

1-8  ofl%... 

.00005 

.00017 

.00055 

.00105 

.00121 

.00154 

.00204 

3-16  of  1%.  .. 

.00007 

.00025 

.00082 

.00157 

.00182 

.00232 

.00306 

1-4  ofl%..  . 

.00010 

.00033 

.00110 

.00209 

.00243 

.00309 

.00409 

5-16  of  1%... 

.00012 

.00042 

.00137 

.00262 

.00303 

.00386 

.00511 

3-8  ofl%... 

.00015 

.00050 

.00164 

.00314 

.00364 

.00463 

.00613 

7-16  of  1%... 

.00017 

.00058 

.00192 

.  00366 

.00424 

.00541 

.00715 

1-2  ofl%... 

.00020 

.00066 

.00219 

.00419 

.00485 

.00618 

.00817 

9-16  of  1%.  .. 

.00022 

.00075 

.00247 

.00471 

.00546 

.00695 

.00919 

5-8  ofl%... 

.00025 

.00083 

.00274 

.00523 

.00606 

.00772 

.01022 

1  1-16  of  1%.. 

.00027 

.00091 

.00301 

.00576 

.00667 

.00850 

.01124 

3-4  ofl%... 

.00030 

.00100 

.00329 

.00628 

.00728 

.00927 

.01226 

13-16  of  1%.. 

.00032 

.00108 

.00356 

.00680 

.00788 

.01004 

.01328 

7-8  ofl%... 

.00035 

.00116 

.00384 

.00733 

.00849 

.01081 

.01430 

15-16  of  1%.. 

.00037 

.00125 

.00411 

.00785 

.00909 

.01159 

.01532 

1%.. 

.00040 

.00133 

.00439 

.00837 

.00970 

.01236 

.01634 

*  /v  

2%.. 

.00080 

.  00266 

.00877 

.01674 

.01940 

.02472 

.03269 

3%.. 

.00120 

.  00399 

.01316 

.02511 

.02910 

.03707 

.  04903 

4%.. 

.00160 

.00532 

.01754 

.  03349 

.03880 

.  04943 

.06538 

5%.. 

.00199 

.00664 

.02193 

.04186 

.04850 

.06179 

.08172 

~  /v  
6%.. 

.00239 

.00797 

.02631 

.05023 

.05820 

.07415 

.09807 

198  FOREIGN  EXCHANGE  TEXT  BOOK 

To  above  figures,  the  cost  per  pound  sterling  for  internal 
revenue  stamp,  should  be  added,  namely,  .0024  cents. 

EXAMPLE. — Find  interest  and  cost  of  revenue  stamp  per 
pound  on  60  days'  sight  bill  of  exchange  at  2  7-16%. 
OPERATION: 

Interest,  63  days  (3  days  grace)  at  2%  =  .01674 
Interest,  63  days  (3  days  grace)  at  7-16%  =  .00366 
Cost  of  revenue  stamp  per  pound  =  .  0024 

ANSWER— Total 02280 

Notes  on  English  Bills  of  Exchange. 

The  commercial  signs  used  for  expressing  the  different  denominations 
of  English  money  are:  £  for  pound  sterling,  placed  before  the  figures, 
thus — £5,  £100,  etc.  Shillings  are  designated  by  "s"  or  a  stroke  / 
following  the  figures:  10s.  or  10/.  Pence  by  "d"  (the  initial  letter  of  the 
latin  word  "denarus")  placed  after  the  figures:-  5d,  lOd,  etc.  Put  to- 
gether the  correct  way  of  writing  the  above  denominations  is  £5.  10s.  2d, 
or  £5.  10/2d,  or  simply  £5-10-2. 

The  discount  rate  for  short  time  bills,  3,  10,  15  or  18  days  sight, 
is  higher  than  for  30  or  60  days'  sight  bills,  for  the  reason  English  bankers 
hesitate  re-discounting  short  time  bills.  The  seemingly  high  ratio  of 
difference  between  60  and  90  days'  sight  "payment"  bills  as  compared 
with  30  days'  sight,  is  due  to  the  element  of  chance  of  loss  on  account  of 
adverse  course  of  the  discount  rates.  As  a  rule,  however,  90  days'  sight 
bills  are  drawn  "FOR  ACCEPTANCE,"  and  this  type  of  bills  naturally  take 
a  higher  rate  of  discount. 

Bills  of  exchange  drawn  on  England  outside  of  London  are  generall}' 
worth  1-4  cent  per  pound  less  to  cover  collection  charges  and  transfer  of 
proceeds  to  London.  Bills  on  Ireland  and  Scotland  are  usually  worth 
1-4  cent  per  pound  less  than  bills  on  London. 

Bills  of  exchange  on  English  colonies  bearing  the  clause  "With 
exchange  and  all  stamp  duties  for  negotiating  bills  on  London"  added 
are  usually  on  a  par  with  bills  drawn  on  London. 

Bills  of  exchange  on  Denmark,  Sweden  and  Norway  drawn  in  English 
money  are  generally  worth  about  one  cent  per  pound  less,  and  bills  on 
Italy,  Gibraltar,  Sicily  and  Malta,  2  cents  per  pound  less;  provided, 
however,  such  bills  do  not  bear  the  clause  "Payable  in  London,"  or  "In 
London  Exchange."  If  they  do,  they  are  usually  worth  par  with  bills 
drawn  on  London,  plus  any  extra  cost  for  postage  and  commissions. 

All  endorsements  of  bills,  documents  and  other  paper  must  be  signed 
or  countersigned  in  ink,  as  English  bankers  do  not  recognize  stamped 
endorsements.  The  titles  "Miss,  Mrs.  or  Mr."  should  not  be  made  a  part 
of  an  endorsement.  A  check  drawn  to  the  order  of  Mrs.  Mary  Jones, 
should  be  endorsed  "Mary  Jones;"  a  draft  drawn  to  order  of  Mrs.  John 
Jones  should  be  endorsed  "Mary  Jones,"  wife  of  John  Jones,  etc. 

A  CROSSED  STERLING  CHECK  is  one  payable  either  to  bearer  or  order, 
having  the  name  of  a  banker  or  two  parallel  lines  and  the  abbreviation 
"&  Co."  written  or  printed  across  the  face,  thus:  =          =====  &  Co. 

The  effect  is  to  direct  the  bank  upon  whom  it  is  drawn  to  pay  same  only 
when  coming  to  them  through  some  other  bank.  It  is  intended  as  an 
additional  safeguard  against  wrong  payment. 

In  most  foreign  countries  it  is  the  custom  of  bankers  and  others  in 
the  cashing  of  checks,  whether  drawn  payable  to  order  or  bearer,  to  pay 
to  the  person  presenting  same,  and  under  the  laws  existing  in  these 
countries,  the  paying  bank  or  banker  would  not  be  held  liable  for  wrong 
payment.  As  a  reason  for  this  seemingly  risky  method,  it  is  claimed  that 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  199 

on  account  of  the  very  severe  penalty  imposed  for  forgery  under  their 
laws,  the  requiring  of  strict  personal  identification,  as  exacted  by  banks 
in  the  United  States,  is  found  unnecessary. 

As  an  additional  precaution  against  wrong  payment,  the  laws  of 
Great  Britain  require  that  where  a  check  is  crossed,  as  explained  above, 
while  not  requiring  personal  identification,  it  must  be  cashed  through 
some  bank  other  than  the  one  upon  which  it  is  drawn. 

Notwithstanding  the  requirements  under  the  laws,  we  presume  a 
reasonable  amount  of  care  is  exercised  by  banks  to  prevent  losses  by 
incorrect  payment,  and  we  are  informed  that  in  some  countries,  strangers 
presenting  checks  drawn  to  their  order,  are  required  to  make  affidavit 
that  they  are  the  person  named,  for  which  affidavit  the  paying  bank 
exacts  a  small  fee. 

Buying  Bills  of  Exchange  on  France- 
Ex  AMPLE  No.   1. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Paris, 
France;  draft  drawn  payable  30  days  after  sight;  documents 
(bill  of  lading  and  insurance  certificate)  for  delivery  upon 
payment  of  draft;  discount  rate  3%;  market  rate  for  demand 
checks  on  Paris  on  date  of  purchase,  francs  5.16^. 
OPERATION: 

Market  rate  for  demand  checks  on  Paris Fr.  5. 1625 

Interest  (or  rebate)  30  days  at  3%  (see  table) . .  .0130 

Cost  of  revenue  stamp,  1-20  of  1%  of  rate,  or  50 

centimes  per  1,000  francs .0026 

Profit  ^  of  1%  of  rate  (varies  according  to  con- 
ditions)   .0129 


Purchasing  price  per  Si. 00 Fr.  5 . 1910 

Or  5.18|  francs  minus  1-16  of  1%. 

NOTE. — The  item  of  J  of  1%  profit  is  used  merely  for  illustration. 
It  is  customary  for  buyers  to  figure  from  1-16  to  J  of  1%  according  to 
conditions,  competition,  etc.  If  this  bill  had  been  drawn  upon  a  city  in 
France  other  than  Paris,  from  1-10  to  1-16  of  1%  additional  would  be 
deducted  for  cost  of  collecting  draft  and  remitting  proceeds  to  Paris. 
The  item  of  interest  is  taken  from  printed  tables  figured  out  to  show 
Interest  for  various  periods  at  the  different  rates  per  cent.  The  French 
government  requires  that  revenue  stamps^jto,  the  value  of  50  centimes 
per  1000  francs,  be  affixed  to  drafts  at  time  of  acceptance,  which  is 
equivalent  to  1-20  of  1%  of  rate,  which  in  above  case  (rate  francs  5. 16J) 
would  be  franc  0.0026.  It  will  be  noted  that  the  higher  the  quotation 
for  francs  per  $1.00  the  lower  is  the  rate. 

EXAMPLE  No.  2. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Mar- 
seilles, France;  draft  drawn  payable  60  days  after  sight;  docu- 
ments (bill  of  lading  and  insurance  certificate)  for  delivery  upon 
acceptance  of  draft;  discount  rate  1\% ;  market  rate  for  demand 
checks  ON  PARIS  upon  date  of  purchase,  francs  5.16i  minus 
1-32  of  1%. 


200  FOREIGN  EXCHANGE  TEXT  BOOK 

OPERATION: 

Market  rate  for  demand  checks  on  Paris,  francs 

5.16i-l-32 fFr.5.16406 

Interest  60  days  at  rate  2f%  (see  table) .02382 

Cost  of  revenue  stamps  (1-20  of  1%  of  rate) . . .  .0026 

Profit  i  of  1%  of  rate  (see  note  under  Ex.  No.  1).  .0129 

Cost  of  collecting  and  sending  funds  to  Paris 

(1-16  of  1%) .00324 

Purchasing  price  per  $1.00 Fr.  5 . 20662 

Or  francs  5.20f  minus  1-64  of  1%. 
See  Fractional  French  rates. 

fNoTE. — See  note  under  Example  1.  Where  the  rate  is  supplemented 
by  fractional  quotations  such  as  minus  or  plus  1-32,  1-16,  3-32,  £,  etc., 
of  1%  the  equivalent  of  the  fraction  so  used  is  added  or  deducted,  as 
case  may  be,  to  the  rate  (see  fractional  French  rates).  For  illustration: 
1-32  of  1%  of  francs  5.16|  (5. 1625)  =  .  00156,  which  added  to  rate 
5.1625  gives  5.16406  or  5. 1 6 J— 1-32.  Francs  5.20674  per  $1.00,  the 
purchasing  price  in  above  example,  not  being  a  regular  commercial 
quotation  (see  quotations  on  foreign  exchange,  Chap.  IV.),  it  is  necessary 
to  supplement  a  regular  quotation  such  as  5.20  or  5.20|,  etc.,  with  a 
fractional  quotation,  plus  or  minus  1-64,  1-32,  etc.  In  this  case  the 
nearest  quotation  would  be  minus  1-64  of  1%.  For  illustration: 

5.20^=5.20625 
1-64  of  1%  of  5.20|=    .00078  See  fractional  French  rates 

Total,  5.  20703  or  francs  5.-20|— 1-64 


EXAMPLE  No.  3. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Paris, 
France;  draft  drawn  payable  3  days  after  sight;  with  or  with- 
out documents;  discount  rate  3%;  market  rate  for  demand 
check  on  Paris  upon  date  of  purchase,  francs  5.16^  plus  1-32 
of  1%. 

OPERATION: 

Market  rate  for  demand  check  on  Paris  (5.16^ 

+  1-32 Fr.  5 . 16094 

Interest  3  days  (no  days  of  grace)  at  3% 0013 

Cost  of  revenue  stamp .  0026 

Profit  i  of  1%  of  rate  (see  note  above) .0129 

Purchasing  price  per  $1.00 Fr.  5 . 17774 

Or  francs  5.17J  minus  1-16  of  1%. 

NOTE. — See  note  under  Example  1.  Where  the  rate  is  supplemented 
by  fractional  quotation,  such  as  francs  5.  16J  plus  1-32  of  1%,  as  in  this 
case,  the  equivalent  fraction  so  used  is  added  or  deducted — added  if 
minus  or  deducted  if  plus — to  the  rate.  In  the  example  above  1-32  of 
1%  of  5. 1625=. 00156  (see  fractional  French  rates)  which  deducted 
from  5.  1625=5.  16094.  As  the  purchasing  price  in  this  example  (francs 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  201 

5.  1777)  is  not  a  regular  rate  (see  quotations  on  French  exchange,  Chap.  IV), 
the  nearest  regular  rate  would  be  francs  5.17£  minus  1-16  of  1%,  or 
francs  5.1750  plus  .00313  (see  fractional  French  rates)  which  makes 
francs  5.  1781,  the  nearest  regular  quotation. 

EXAMPLE  No.  4. 

FRENCH    EXCHANGE  —  BILLS   ON    BELGIUM   AND   SWITZERLAND. 

ILLUSTRATION.  —  A  commercial  bill  of  exchange  on  Antwerp, 
Belgium;    draft  drawn  payable  90  days  after  sight;    documents 
(bill  of  lading,  etc.)  to  be  delivered  upon  acceptance  of  draft; 
discount  rate  3%;    market  rate  for  demand  checks  ON  PARIS 
upon  date  of  purchase,  francs  5.16^. 
OPERATION: 

Market  rate  for  demand  checks  on  Paris  .......   Fr.  5  .  1625 

Interest  60  days  at  3%  ......................  .  0260 

Cost  of  revenue  stamp  (1-20  of  1%  of  rate)  ....  0026 

Profit  of  i-  of  1%  of  rate  (5.16i)  ................  0129 

Cost    of   collecting   and    transferring   funds   to 

Paris  (3-16  of  1%)  .......................  .0097 

Purchasing  price  per  $1.00  ..................      Fr.  5.2137 

Or  francs  5.2  H  minus  1-64  of  1%. 


NOTE.  —  In  buying  bills  of  exchange  drawn  upon  cities  in  Belgium 
and  Switzerland,  it  is  usually  necessary  to  have  the  funds  collected  at 
point  payable  and  remitted  to  Paris,  for  which  service  the  collecting 
hanks  charge  about  3-16  of  1%.  The  purchasing  price  in  above 
example  (5.2137)  not  being  a  regular  commercial  rate  the  nearest  rate 
is  used  by  supplementing  to  same  a  fractional  rate.  For  example: 
5.21J  minus  1-64  of  1%,  which  is  5.2125  plus  .00078  =  5.2133  (see 
fractional  French  rates). 

Fractional  French  Rates. 

In  buying  and  selling  commercial  bills  of  exchange  drawn 
in  French  money,  where  the  rates  quoted  or  offered  are  supple- 
mented with  the  FRACTIONAL  quotations  of  plus  or  minus  1-64, 
1-32,  1-16,  3-32  or  1-8  of  1  per  cent,  it  is  necessary  to  apply 
these  fractions  to  the  rate  in  figuring  the  value  of  the  bills. 
We,  therefore,  give  the  decimals  of  these  fractions  for  adding 
to  or  deducting  from  the  regular  rates,  as  the  case  may  be, 
together  with  illustrations  as  follows: 

If  fraction  is  minus  1-64  of  1%  ADD         decimal  .00078  to  rate 

If  fraction  is  plus  1-64  of  1%  DEDUCT  decimal  .00078  from  rate 

If  fraction  is  minus  1-32  of  1%  ADD         decimal  .00156  to  rate 

If  fraction  is  plus  1-32  of  1%  DEDUCT  decimal  .00156  from  rate 

If  fraction  is  minus  1-16  of  1%  ADD         decimal  .00313  to  rate 

If  fraction  is  plus  1-16  of  1%  DEDUCT  decimal  .00313  from  rate 

If  fraction  is  minus  3-32  of  1%  ADD         decimal  .00469  to  rate 

If  fraction  is  plus  3-32  of  1%  DEDUCT  decimal  .00469  from  rate 

If  fraction  is  minus  1-8    of  1%  ADD         decimal  .00625  to  rate 

If  fraction  is  plus  1-8    of  1%  DEDUCT   decimal  .00625  from  rate 


202 


FOREIGN  EXCHANGE  TEXT  BOOK 


EXAMPLES: 

Francs  5.15|— 1-32 


Francs  5.16J+1-32 


would  be  francs 
and  decimal 

Or  francs 

would  be  francs 
less  decimal 

Or  francs 


5. 15625 
.00156 

5.15781 

5.1625 
.00156 

5.16094 


EXPLANATION.— 1-32  of  1%  of  $1.00=. 03125  cents,  and  in  order 
to  reduce  same  to  centimes,  multiply  this  amount  by  .  05  (there  being 
5  centimes  to  1  cent)  which  gives  decimal  .0015625,  or  .00156  as  used 
in  above  table. 


French  Exchange  Interest  Table. 

Showing  interest  per  $1.00  for  use  in  purchasing  bill  of 
exchange  drawn  payable  3,  10,  30,  60  and  90  days  after  sight. 

(Computed  on  basis  of  francs  5.20  per  $1.00,  and  360  days 
per  year.) 


Interest  or 
Discount  Ra*.e 

3 
Days  Sight 

10 
Days  Sight 

30 
Days  Sight 

60 
Days  Sight 

90 
Days  Sight 

1-16  of  1%  

Centimes 

.00003 

Centimes 

.00009 

Centimes 

.00027 

Centimes 

.00054 

Centimes 

.00081 

1-8    of  1%  
3-16  of  1%... 

.00005 
.00008 

.00018 
.00027 

.00054 
.00081 

.00108 
.00162 

.00162 
.00244 

1-4    of  1%.. 

.00011 

.00036 

.00108 

.00217 

.00325 

5-16  of  1%  
3-8    of  1%... 

.00014 
.00016 

.00045 
.00054 

.00135 
.00162 

.00271 
.00325 

.00406 
.00487 

7-16  of  1%..  .  

.00019 

.00063 

.00190 

.00379 

.00569 

1-2    of  1%  
9-16  of  1%  

.00022 
.00024 

.00072 
.00081 

.00217 
.00244 

.00433 
.00487 

.00650 
.00731 

5-8    of  1%  
11-16  of  1%... 

.00027 
.00030 

.00090 
.00099 

.00271 
.00298 

.00542 
.00596 

.00812 
.00894 

3-4    of  1%  
13-16  of  1%  
7-8    of  1  %  ... 

.00032 
.00035 
.  00038 

.00108 
.00117 
.00126 

.00325 
.00352 
.00379 

.00650 
.00704 
.00758 

.00975 
.01056 
.01137 

15-16  of  1%  
1%.. 

.00041 
.00043 

.00135 
.00144 

.00406 
.00433 

.00812 
.00867 

.01219 
.01300 

2%.. 

.00087 

.00289 

.00867 

.01733 

.0->600 

3%.. 

00130 

00433 

01300 

02600 

.  (  13900 

4%.. 

.00173 

.00578 

.01730 

.03467 

.  (  )5200 

5%.. 

00217 

00722 

0?167 

04333 

.06500 

6%  

.00260 

.00867 

.02600 

.05200 

.07*00 

To  above  figures  the  cost  per  SI. 00  for  internal   revenue 
stamps  should  be  added,  namely,   .0026  centimes. 


BUYING  FOREIGN  COMMEKCIAL  BILLS  OF  EXCHANGE  203 

EXAMPLE. — Find   interest  and  cost  of  revenue  stamps  per 
$1.00  on  30  days  sight  bill  of  exchange  at  3J%. 
OPERATION: 

Interest,  30  days  at  3%=  .013 

Interest,  30  days  at  J%  =  .00217 

Cost  of  revenue  stamp    =  .  0026 

ANSWER — Total  .01777 

(This    amount    should    be    added    to    demand    rate,    NOT 

DEDUCTED.) 

Notes  on  French  Bills  of  Exchange. 

Documentary  payment  bills  can  be  discounted  with  banks  under  the 
Bank  of  France  rate,  which  is  not  customary  in  England.  In  discounting 
acceptance  bills,  banks  usually  calculate  the  last  5  days  at  the  official 
Bank  of  France  rate,  and  the  balance  of  time  at  the  private  discount  rate. 

Discountable  bills  on  first  class  commercial  firms  are  discounted  ai 
the  open  market  rate. 

On  bills  which  have  matured  (become  due)  the  law  grants  grace  until 
12  o'clock  noon  the  day  following  day  of  maturity. 

The  internal  revenue  stamp  tax  on  all  bills  of  exchange  is  1-20  of  1%, 
or  50  centimes  per  1,000  francs,  with  minimum  of  10  centimes. 

Checks  drawn  payable  in  France  must  ALWAYS  be  dated  in  words, 
otherwise  they  are  subject  to  a  tax.  For  example:  February  tenth,  1906. 
The  reason  for  same  is  this:  The  law  requires  that  a  check  be  paid  within 
eight  days  from  date  of  issue,  otherwise  it  is  considered  a  bill  of  exchange. 
If  the  checks  were  dated  in  figures,  changes  in  the  date  to  bring  it  within 
the  limit  could  easily  be  made  and  thus  the  tax  would  be  evaded.  A 
change  in  the  written  date  can  be  detected  more  readily,  and  hence  the 
requirement. 


Buying  Bills  of  Exchange  on  Germany. 

EXAMPLE  No.  1. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Berlin 
or  Hamburg,  Germany;  draft  drawn  payable  90  days  after 
sight;  documents  (bill  of  lading,  etc.)  for  delivery  upon  accept- 
ance of  draft;  discount  rate,  4f%.  Market  rate  for  demand 
checks  on  Berlin  or  Hamburg  on  date  of  purchase,  95  3-16 
cents  per  4  marks. 

OPERATION: 

Market  rate  for  demand  checks  on  Berlin 

at  rate  95  3-16  cents 951875 

Interest,  90  days  at  4f%  (per  4  marks)      .01098 

Cost  of  revenue  stamps  (per  4  marks).. .      .0005 

Profit  \  of  1%  (varies  according  to  con- 
ditions)   00238  .013860 


Purchasing  price  per  4  marks .938015 

Or  93  13-16  minus  1-64  of  1%. 


204  FOREIGN  EXCHANGE  TEXT  BOOK 

NOTE. — For  item  of  interest  or  discount  and  revenue  stamp  see  table, 
page  205.  The  item  of  profit  is  used  merely  for  illustration.  It  is  cus- 
tomary for  buyers  to  figure  from  i-16  to  $%  according  to  conditions, 
competition,  etc.  Bills  drawn  on  Hamburg  or  Berlin  are  generally  at 
same  rate.  If  bills  are  drawn  on  cities  in  Germany  other  than  Berlin  or 
Hamburg,  the  cost  of  collecting  and  remitting  to  these  cities  must  be  con- 
sidered, usually  1-16%.  The  cost  of  revenue  stamp  is  figured  thus:  50 
pfennigs  per  1,000  marks  is  equivalent  to  1-20  of  1%  of  rate  per  4  marks; 
1-20  of  1%  of  95  cents  equals  .000475;  or,  as  generally  figured,  .0005  cents. 


EXAMPLE  No.  2. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Hamburg, 
Germany;  draft  drawn  payable  30  days  after  sight;  documents 
for  delivery  upon  payment  of  draft;  discount  rate  on  date  of 
purchase,  3J%:  market  rate  for  demand  checks  on  Hamburg 
and  Berlin  on  date  of  purchase,  95^— 1-32,  or  95J  cents  per 
4  marks,  minus  1-32  of  1%. 

OPERATION: 

Market  rate  for  demand  checks  on  Ham- 
burg, 95^—1-32 9547 

Interest,  30  days  at  3*%  (per  4  marks) .  .      .  00278 
Cost  of  revenue  stamps  (per  4  marks).. .      .0005 
Profit  i  of  1%  (varies  according  to  con- 
ditions)...  00238     .00566 

Purchasing  price  per  4  marks .94904 

Or  94  13-16  plus  3-32  of  1%. 

NOTE. — As  the  commercial  quotations  are  by  16ths,  8ths,  or  multiples 
of  same,  the  fractions  1-64,  1-32,  1-16,  1-8,  3-32,  etc.,  plus  or  minus,  are 
used  when  necessary.  (See  quotations  on  German  Exchange,  Chap.  IV.) 

94  13-16  expressed  decimally  would  be       .948125 
3-32  of  1%  of  95  cents  =  .000893 


Total  .949018   or  94   13-16+3-32 


Fractional  German  Exchange  Quotations. 

In  buying  and  selling  commercial  bills  of  exchange,  where 
the  rates  quoted  or  offered  are  supplemented  with  the  FRAC- 
TIONAL quotations  of  plus  or  minus  1-64,  1-32,  1-16,  3-32  or 
1-8,  etc.,  it  is  necessary  for  convenience  in  figuring  to  apply 
these  fractions  to  the  rate  to  determine  value  of  the  bills.  We 
therefore  give  below  the  decimals  of  these  fractions,  pointed 
off  as  in  dollars  and  cents,  for  adding  to  or  deducting  from 
the  regular  rates,  as  the  case  may  be,  together  with  an  illus- 
*  rat  ion  of  their  use. 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE 


205 


If  fraction  is  minus  1-64  of  1%,  deduct  from  rate  decimal  .000149 

If  fraction  is  minus  1-32  of  1%,  deduct  from  rate  decimal  .000298 

If  fraction  is  minus  3-64  of  1%,  deduct  from  rate  decimal  .000446 

If  fraction  is  minus  1-16  of  1%,  deduct  from  rate  decimal  .000595 

If  fraction  is  minus  5-64  of  1%,  deduct  from  rate  decimal  .000744 

If  fraction  is  minus  3-32  of  1%,  deduct  from  rate  decimal  .000893 

If  fraction  is  minus  1-8     of  1%,  deduct  from  rate  decimal  .001191 

NOTE. — When  fractional  quotation  is  PLUS  add  the  decimals. 
EXAMPLE. — Express  decimally  the  rate  95  3-16  plus  3-64  of  1%. 
OPERATION.— 95  3-16=  .951875 

3-64  of  1%=          .000446 


ANSWER 


.952321  cents 


German  Exchange  Interest  Tables. 

Showing  interest  per  4  marks  for  use  in  purchasing  bills 
of  exchange  drawn  payable  3,  10,  30,  60  and  90  days  after  sight. 

(Computed  on  basis  of  95  cents  per  4  marks,  and  360  days 
per  year.) 


Interest  or 
Discount  Rate 

3 
Days  Sight 

10 
Days  Sight 

30 
Days  Sight 

60 
Days  Sight 

90 
Days  Sight 

1-16  of  1%... 

Cents 

.00001 

Cents 

.00002 

Cents 

.00005 

Cents 

.00010 

Cents 

.00015 

1-8  of  1%  

.00001 

.00003 

.00010 

.00020 

.  00030 

3-16  of  1%  

.00001 

.00005 

.00015 

.00030 

.00045 

1-4  of  1%.. 

.00002 

.00007 

.00020 

.00040 

.00059 

5-16  of  1%  

.00002 

.00008 

.00025 

.00049 

.00074 

3-8  of  !%...-.  

.00003 

.00010 

.00030 

.00059 

.00089 

7-16  of  1%... 

.00004 

.00012 

.00035 

.00069 

.00104 

1-2  of  1%.. 

.00004 

.00013 

.00040 

.00079 

.00119 

9-16  of  1%  

.00004 

.00015 

.00045 

.00089 

.00134 

5-8  of  1%... 

.00005 

.00016 

.00050 

.00099 

.00148 

11-16  of  1%  

.00005 

.00018 

.00054 

.00109 

.00163 

3-4  of  1%  

.00006 

.00020 

.00059 

.00119 

.00178 

13-16  of  1%  
7-8  of  1%... 

.00006 
.00007 

.00021 
.00023 

.00064 
.00069 

.00129 
.00139 

.00193 
.00208 

15-16  of  1%  

.00007 

.00025 

.00074 

.00148 

.00223 

1%.. 

.00008 

.00026 

.00079 

.00158 

.00237 

2%  . 

.00016 

.  00053 

.00158 

.00317 

.00475 

3%.. 

00024 

.00079 

.00238 

.  00475 

.00712 

4%.. 

.00032 

.00106 

.00317 

.00633 

.00950 

5%  . 

.  00040 

.00132 

.00396 

.00792 

.01187 

6%.. 

.00047 

.00158 

.00475 

.00950 

.01425 

To  above  figures,  the  cost  per  4  marks  for  internal  revenue 
stamps,  should  be  added,  namely,  .0005  cents. 


206  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE. — Find  interest  and  cost  of  revenue  stamps  per 
4  marks  on  60  days'  sight  bill  of  exchange  at  4£%. 

OPERATION: 

Interest  60  days  at  4%  =  .  00633 

Interest  60  days  at  f  %  =  .  00099 

Cost  of  revenue  stamps  =  .  0005 

ANSWER — Total  .  00782  cents 


Notes  on  German  Bills  of  Exchange. 

The  rate  for  demand  checks  is  usually  the  same  whether  on  Hamburg 
or  Berlin. 

The  German  Government  requires  that  revenue  stamps  to  the  value 
of  50  pfennigs  per  1,000  marks  be  affixed  to  drafts  drawn  for  1  day's  sight 
and  over,  at  time  of  acceptance  of  drafts. 

Three  days'  sight  letters  of  delegation  are  not  subject  to  stamp  duty; 
three  days'  sight  and  all  other  time  drafts  are  taxed  approximately  .0005 
cents  for  every  4  marks,  or  say  $1.00.  The  rate  of  stamp  tax  is  equivalent 
to  1-20  of  1%. 

The  following  is  schedule  of  stamp  duty: 

On  amounts  up  to  200  marks,  10  pfennigs. 

On  amounts  of  200  to  400  marks,  20  pfennigs. 

On  amounts  of  400  to  600  marks,  30  pfennigs. 

On  amounts  of  600  to  800  marks,  40  pfennigs. 

On  amounts  of  800  to  1,000  marks,  50  pfennigs. 

Over  1,000  marks,  50  pfennigs  per  1,000  marks  or  fraction  thereof. 

IMPORTERS  IN  GERMANY  will  not  accept  drafts  against  importations 
until  the  duplicate  documents  (duplicate  draft,  bill  of  lading,  etc.)  are 
presented,  and  in  order  to  have  the  original  draft  accepted  immediately 
upon  its  arrival,  banks  in  this  country  when  forwarding  such  bills  for 
acceptance  and  collection  will  attach  to  the  original  draft  a  memorandum 
agreement  to  the  effect  that  the  duplicate  of  bill  of  lading  is  in  their  pos- 
session, and  their  correspondents  (banks)  are  requested  to  guarantee  the 
acceptors  (importers)  that  the  duplicate  documents  will  be  delivered  to 
them  as  soon  as  received,  which  guarantee  also  gives  the  number  and 
amount  of  draft,  the  name  of  drawer  and  the  signature  of  a  proper  official 
of  the  bank  or  financial  institution  forwarding  same. 


Buying  Bills  of  Exchange  on  Holland. 

On  account  of  the  large  export  business  from  the  United 
States  to  Holland  (the  Netherlands) — amounting  to  nearly 
5  per  cent  of  our  total  exports — the  greater  part  of  which  is 
to  Amsterdam  and  Rotterdam,  the  Holland  business  may  be 
classed  as  next  in  importance  after  the  German  and  French. 
Owing,  however,  to  the  comparatively  small  demand  in  the 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  207 

United  States  for  remittances  to  Holland  the  surplus  of  money 
accumulated  to  the  credit  of  American  bankers  necessarily 
has  to  be  transferred  to  other  centers,  such  as  London,  Paris, 
Berlin,  etc.,  which  can  usually  be  done  through  arbitration,  as 
explained  in  Chapter  VIII.  The  method  of  buying  bills  of 
exchange  on  Holland  is  as  follows: 


EXAMPLE  No.   1. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Amster- 
dam, Holland;  draft  drawn  payable  3  days  after  sight;  docu- 
ments for  delivery  upon  payment  of  draft;  discount  rate,  3f%; 
market  rate  for  demand  checks,  on  date  of  purchase  40^  cents 
per  gulden  (guilder  or  florin). 

OPERATION: 

Market  rate  for  demand  check  on  Amster- 
dam    .4025 

Interest  (or  rebate)  3  days  at  3f  % 00012 

Cost  of  revenue  stamp,  none  required. .  .      .0000 

Profit  1-16  of  1%  (varies  according  to 

conditions) 00025  .00037 

Purchasing  price  per  gulden .40213 

Or  rate,  40.20  cents  per  gulden. 


EXAMPLE  No.  2. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Rotter- 
dam, Holland;  draft  drawn  payable  10  days  after  sight;  docu- 
ments for  delivery  upon  acceptance  of  draft;  discount  rate 
3f%;  market  rate  for  demand  checks  on  Rotterdam  on  date 
of  purchase,  40  3-16—1-32  of  1%  per  gulden. 

OPERATION: 

Market  rate  for  demand  checks  on  Rot- 
terdam    . 401751 

Interest,  10  days  at  3|% 00037 

Cost  or  revenue  stamps  (1-20  of  1  %)  ...      .0002 

Profit  1-16  of  1%  (varies  according  to 

conditions) 00025  .00082 

Purchasing  price  per  guiden  .400931 

Or  rate,  40.10  cents  per  gulden. 


208  FOREIGN  EXCHANGE  TEXT  BOOK 

EXAMPLE  No.  3. 

ILLUSTRATION. — A  commercial  bill  of  exchange  on  Amster- 
dam, Holland;  draft  drawn  payable  60  days  after  sight;  docu- 
ments for  delivery  upon  payment  of  draft;  discount  rate  3  7-16%; 
market  rate  for  demand  checks  on  Amsterdam  upon  date  of 
purchase,  40  5-16+1-64  per  gulden. 

OPERATION: 

Market  rate  for  demand  checks  on  Am- 
sterdam    .403187 

Interest  60  days  at  rate  3  7-16% 00229 

Cost  of  revenue  stamp  (1-20  of  1%) 0002 

Profit  |  of  1%  (varies  according  to  con- 
ditions)   0005  .00299 

Purchasing  price  per  gulden .400197 

Or  rate,  40+3-64  per  gulden. 


Holland  Exchange  Fractional  Quotations. 

In  buying  and  selling  bills  of  exchange,  drawn  in  the  money 
of  Holland,  where  the  rate  quoted  or  offered  is  supplemented 
with  a  fractional  quotation  such  as  minus  or  plus  1-64,  1-32, 
3-64,  1-16,  1-8,  etc.  of  1  per  cent,  it  is  necessary  for  convenience 
in  figuring  to  apply  these  fractions  to  the  rate.  We,  therefore, 
give  below  the  decimals  of  these  fractions  pointed  off  as  in 
dollars  and  cents,  for  adding  to  or  deducting  from  the  regular 
rates,  as  case  may  be,  together  with  an  illustration  of  their  use: 

If  fraction  is  minus  1-64  of  1%,  deduct  from  rate  decimal  .000062. 

If  fraction  is  minus  1-32  of  1%,  deduct  from  rate  decimal  .000124. 

If  fraction  is  minus  3-64  of  1%,  deduct  from  rate  decimal  .000186. 

If  fraction  is  minus  1-16  of  1%,  deduct  from  rate  decimal  .000248. 

If  fraction  is  minus  5-64  of  1%,  deduct  from  rate  decimal  .000310. 

If  fraction  is  minus  3-32  of  1%,  deduct  from  rate  decimal  .000372. 

If  fraction  is  minus  7-64  of  1%,  deduct  from  rate  decimal  .000434. 

If  fraction  is  minus  1-8    of  1%,  deduct  from  rate  decimal  .000496. 

NOTE. — When  fraction  quoted  is  PLUS  the  above  decimals  should  be 
added  to  rate. 

EXAMPLE. — Express  decimally  the  rate,  40  5-16-|-l-64. 

OPERATION-.—      40  5-16=. 403125 
+  1-64%=  .000062 

ANSWER  .403187 


BUYING  FOREIGN  COMMERCIAL  BILLS  OF  EXCHANGE  209 

Holland  Exchange  Interest  Tables. 

Showing  interest  per  gulden  (guilder  or  florin)  for  use  in 
purchasing  bills  of  exchange  drawn  payable  in  3,  10,  30,  60  and 
90  days  after  sight. 

(Computed  on  basis  of  40  cents  per  gulden,  and  360  days 
per  year.) 


Interest  or 
Discount  Rate 

3 
Days  Sight 

10 
Days  Sight 

30 
Days  Sight 

60 
Days  Sight 

90 
Days  Sight 

1-16  of  1%.  .. 

Cents 
.00001 

Cents 

.00001 

Cents 

.00002 

Cents 
.  00004 

Cents 
.00006 

1-8  of  1%  

.00001 

.00001 

.00004 

.00008 

.00013 

3-16  of  1%  

.00001 

.00002 

.00006 

.00012 

.00019 

1-4  of  1%... 

.00001 

.00003 

.00008 

.00017 

.00025 

5-16  of  1%  

.00001 

.00003 

.00010 

.00021 

.00031 

3-8  of  1%.. 

.00001 

.00004 

.00013 

.00025 

.00038 

7-16  of  1%  

.00001 

.00005 

.00015 

.00029 

.00044 

1-2  Of  l°/r. 

.00002 

.00006 

.00017 

.00033 

.00050 

9-16  of  1%  

.00002 

.00006 

.00019 

.00037 

.00056 

5-8  of  1%  

.00002 

.00007 

.00021 

.00042 

.00063 

11-16  of  1% 

.00002 

.00008 

.00023 

.00046 

.00069 

3-4  of  1  %  

.00002 

.00008 

.00025 

.00050 

.00075 

13-16  of  1%  

.00003 

.00009 

.00027 

.00054 

.00081 

7-8  of  1  %  

.00003 

.00010 

.00029 

.00058 

.00088 

15-16  of  1% 

.00003 

.00010 

.00031 

.00063 

.00094 

1%.. 

.00003 

.00011 

.00033 

.00067 

.00100 

2%  . 

.00007 

.00022 

.00067 

.00133 

.00200 

3%.. 

.00010 

.00033 

.00100 

.00200 

.00300 

4%.. 

.00013 

.00044 

.00133 

.00267 

.00400 

5%., 

.00017 

.00055 

.00167 

.00333 

.00500 

6% 

.00020 

.00066 

.00200 

.00400 

.00600 

To  the  above  figures  the  cost  per  gulden  for  revenue  stamps 
should  be  added,  namely,  .0002  cents. 

EXAMPLE. — Find  interest  and  cost  of  revenue  stamp   per 
gulden  on  60  days'  sight  bill  of  exchange  at  rate  3  7-16%. 

OPERATION: 

Interest,  60  days  as  3%       =  .  002 
Interest,  60  days  at  7-16%=  .00029 
Cost  revenue  stamp  =  .  0002 


ANSWER — Total 


.00249  cents 


210  FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "Y" 

Reduced  Facsimile  of  Specimen  Copy  of 

HYPOTHECATION  CERTIFICATE. 
BILLS  OF  EXCHANGE. 


To  the  NATIONAL  BANK  OF  THE  REPUBLIC. 
CHICAGO. 

GENTLEMEN  : — 

Having  in  contemplation  transactions  with  you  fr"m  time  to  time  in  the  sale  of  Bills  of  Exchange 
with  Shipping  Documents  for  goods  or  produce  attached  as  collateral  security,  which  documents  are  to  be  held  by 
you  for  the  due  payment  of  the  same,  we  hereby  declare  that  upon  the  sale  by  us  to  you  of  any  such  Bills  of 
Exchange  our  agreement  with  you  is  understood  to  be  as  follows : 

You  may  insure  any  goods  forming  the  collateral  security  (if  not  already  insured,  and  the  policy  or  policies 
deposited  in  your  hands),  from  sea  risk,  including  loss  by  capture,  and  from  fire  on  shore,  and  add  the  premiums 
and  expense  thereof  to  the  amount  chargeable  in  respect  of  the  said  Bills,  but  it  shall  not  be  imperative  upon_  you 
to  effect  any  such  Insurance. 

You  may  sell  any  portion  of  the  said  goods  which  you  may  deem  necessary  for  payment  of  such  premiums 
and  expenses,  freight,  or  duties,  and  take  such  measures  generally,  and  make  such  charges  for  commission,  and  are 
to  be  accountable  in  such  manner,  but  not  further  or  otherwise  as  in  ordinary  cases  between  a  Merchant  and  his 
Correspondent. 

You  may  take  conditional  acceptance  to  such  Bills  to  the  effect  that  on  payment  thereof  at  maturity  or  under 
discount  the  documents  handed  to  you  as  collateral  security  shall  be  delivered  to  the  Acceptors,  and  this  shall 
extend  to  acceptances  for  honour 

In  case  default  be  made  in  acceptance  of  the  said  Bills  on-presentation,  we  agree  immediately  on  receiving 
notice  from  you  that  >ou  have  been  advised  by  telegraph  of  such  non-acceptance,  and  without  waiting  for  or 
requiring  the  protest  of  the  said  Bills,  that  we  will  pay  to  you  the  amount  thereof,  with  all  charges  of  every 
description  incurred  by  you  in  consequence  of  the  non-acceptance  of  the  said  Bills,  or  give  you  a  margin  which 
shall  be  satisfactory  to  you,  either  in  cash  or  Securities,  and  notwithstanding  that  the  goods  or  produce  against 
which  the  said  Bill  is  drawn,  or  the  Documents  thereof  remain  in  your  possession  in  the  Unifed  Kingdom  or  else- 
where; and  we  hereby  agree  that  your  account  of  the  disbursements,  commission  and  charges,  incurred  by  you  in 
consequence  of  the  non-acceptance  of  the  said  Bills  shall  be  received  by  us  as  sufficient  evidence  of  the  amount  of 
such  disbursements,  commission  and  charges,  anJ  shall  not  be  open  to  objection  of  any  kind 

In  case  default  be  made  in  acceptance  or  payment  of  any  of  the  said  Bills,  or  if  the  Drawees  or  Acceptors  should 
suspend  payment,  or  be  adjudicated  Bankrupt,  or  execute  any  Deed  of  Arrangement,  Composition,  or  Inspectorship 
or  take  any  other  steps  whatsoever  towards  effecting  a  compromise  or  arrangements  with  their  creditors  during  the 
currency  of  the  said  Bills,  you  may  at  any  time  after  either  of  the  aforesaid  events  taking  place,  sell  the  goods  or 
any  part  thereof  without  notice  .to  or  the  concurrence  of  any  person  whomsoever  without  waiting  for  the  maturity 
of  the  said  Bills,  and  either  by  public  auction  or  private  sale,  and  you  may  act  in  all  respects  as  if  you  had  been 
the  direct  consignee  of  the  goods,  charging  such  commission  as  is  usual  between  a  Merchant  and  his  Correspondent 
in  ordinary  cases,  and  shall  apply  the  net  proceeds  of  my  sale,  after  deducting  any  payment  made  under  the  powers 
herein  contained,  with  interest  thereon  and  the  usual  commission  and  charges,  in  payment  of  the  Bills  wilh  interest, 
re-exchange  and  other  charges,  and  may  retain  the  balance  (if  any)  towards  liquidation  of  any  debt  or  liability  of 
ours  to  you  whether  or  not  the  same  be  then  payable  or  ascertained,  it  being  hereby  agreed  that  the  goods  them- 
selves until  sale  shall  be  liable  for  and  be  charged  with  the  payment  of  all  such  Bills,  with  commission,  interest, 
re-exchange,  and  other  charges,  debts,  or  liabilities,  and  we  agree  that  all  account  sales  and  accounts  current 
furnished  by  you  in  respect  of  the  said  goods  shall  be  received  by  us  as  sufficient  evidence  of  the  accuracy  of  the 
transactions  to  which  they  refer,  and  shall  not  be  open  to  objection  of  any  kind. 

We  further  authorize  you,  in  case  the  net  proceeds  of  the  sale  of  such  goods  shall  be  insufficient  to  pay  the 
amount  of  the  said  Bills,  with  disbursements,  interest,  re-exchange  and  charges,  to  draw  upon  us  at  the  exchange  of 
the  day  lor  the  amount  of  such  deficiency,  and  we  engage  to  honour  such  drafts  on  presentation,  or  even  without 
such  drafts  being  sent,  to  pay  you  the  amount  of  such  deficiency  on  your  informing  us  of  the  amount 

In  case  the  aforesaid  Power  of  Sale  shall  not  have  arisen  during  the  currency  of  the  said  Bills,  you  may  accept 
payment  from  the  Drawees  or  Acceptors  thereof,  and  on  payment  deliver  the  said  Bills  of  Lading  and  Shipping 
Documents  to  such  Drawees  or  Acceptors. 

.  In  case  the  Drawees  or  Acceptors  should  wish  to  take  delivery  of  any  portion  ol  the  Goods  held  as  collateral 
security  against  the  said  Bills  before  maturity  thereof,  you  are  authorized  (hut  not  so  as  to  be  binding  on  you)  to 
make  such  partial  deliveries  on  receiving  paymeni  of  a  proportionate  pa't  of  the  said  Bills 

The  delivery  to  you  as  aforesaid  of  the  above  mentioned  collateral  securities  is  not  to  prejudice  any  of  your 
rights  on  the  said  Bills  in  case  of  dishonour,  nor  shall  any  proceedings  taken  ihereon  prejudicially  affect  your  title 
to  the  said  securities. 

All  rights,  powers,  and  authorities  hereinbefore  given  to  you  shall  extend  to  and  may  be  exercised  by  the" 
holders  for  the  time  being  of  the  said  Bills  and  Shipping  Documents. 

It  is  understood  that  in  the  event  of  Bills  being  paid  under  discount,  rebate  of  interest  shall  be  allowed  a? 
follows  :— 

At  one-half  per  cent  per  annum  above  the  advertised  rale  of  interest  for  short  deposits  allowed  by  the  leading 
London  Joint  Stock  Banks,  if  the  Bills  are  taken  up  in  ihe  United  Kingdom  of  Great  Britain  and  Ireland.  .. 

At  the  current  minimum  rate  of  Discount  of  the  National  Banks  of  France,  Italy,  Belgium  and  Gernany 
respectively  if  taken  up  in  either  of  those  Countries. 


APPENDIX. 


212  FOREIGN  EXCHANGE  TEXT  BOOK 

The  Use  of  the  Cable  in  Foreign  Exchange  Transactions. 

The  large  increase  in  our  trade  with  foreign  countries  is 
almost  wholly  due  to  the  increased  facilities  afforded  by  the 
cable,  which,  in  connection  with  land  lines,  has  united  almost 
every  commercial  center  of  the  world. 

The  operations  in  foreign  commercial  bills  of  exchange  are 
more  satisfactorily  and  effectively  conducted,  and  upon  a 
much  closer  margin.  Instead  of  having  to  wait  for  mail  advices 
of  any  change  in  the  market,  such  information  can  be  obtained 
immediately,  and  the  risks  formerly  necessary  to  assume  are 
removed.  There  was  always  that  possibility  of  some  unfore- 
seen event  which  would  entirely  upset  calculations,  and  exchange 
operations  had  to  be  conducted  with  greater  caution  and  upon 
much  larger  margin  to  avoid  possible  loss.  This  condition 
naturally  restricted  the  volume  of  business. 

There  are  now  in  active  operation  over  300  submarine 
cable  lines,  varying  in  length  from  14  to  over  17,000  miles, 
and  aggregating  about  148,500  miles.  In  addition  there  are 
about  1,150  submarine  cable  lines  aggregating  nearly  20,000 
miles  owned  by  the  various  governments,  Great  Britain  alone 
having  nearly  250  of  a  length  of  nearly  4,000  miles. 

With  the  facilities  now  afforded  by  the  cable,  the  markets 
of  the  world  are  brought  into  close  touch.  The  bankers  and 
financial  institutions  are  advised  from  day  to  day  of  any  finan- 
cial or  other  change  likely  to  affect  the  market.  They  can 
calculate  with  almost  exactness  the  cost  of  any  exchange  in 
which  they  desire  to  operate.  The  cable  has  brought  about  a 
most  marvelous  change  in  the  method  of  operating  in  foreign 
exchange.  For  at  least  a  portion  of  the  day  transactions 
between  New  York,  Boston,  Chicago  and  London  and  other 
foreign  cities  can  be  executed  simultaneously — an  order  to 
buy  in  one  city  being  executed  in  the  other. 

Notwithstanding  submarine  cable  lines  have  been  in 
successful  operation  since  1866,  it  is  only  recently  that  the 
laying  of  a  line  across  the  Pacific  Ocean  was  commenced,  and 
until  this  line  is  finished  cable  messages  to  the  Philippines, 
China  and  Asiatic  points  have  to  go  by  way  of  London,  Suez, 
Bombay,  Singapore,  Cochin  China,  Hong  Kong,  and  thence  to 
Manilla,  a  distance  of  14,000  miles,  at  a  cost  of  about  $2.35  per 
word. 

The  reason  of  there  being  no  line,  heretofore,  across  the 
Pacific  Ocean  may  undoubtedly  be  accounted  for  from  the  fact 
that  until  the  United  States  annexed  Hawaiian  Islands  and 
acquired  the  islands  of  Guam,  Wake  and  the  Philippines,  no 
single  Government  controlled  landing  places  within  suitable 
distance  from  each  other  to  insure  its  successful  working,  since 
submarine  cable  lines  cannot  be  operated  successfully  at  a 


FOREIGN   EXCHANGE  BROKERS  213 

distance  of  more  than  3,500  to  4,000  miles,  without  an  inter- 
mediate station  where  messages  can  be  repeated. 

This  obstacle  being  removed,  we  can  now  look  for  a  cable 
line  between  San  Francisco  and  the  Philippines  and  China  in 
the  very  near  future,  to  be  operated  by  an  American  corpora- 
tion. From  San  Francisco  to  Hawaii,  2,089  miles,  it  is  already 
laid,  and  the  remaining  distance,  Hawaii  to  Wake  Island,  2,040 
miles,  from  Wake  Island  to  Guam,  1,290  miles,  from  Guam  to 
Manilla,  1,500  miles,  and  from  Manilla  to  Hong  Kong,  630 
miles — a  total  distance  of  7,569  miles — will  soon  be  in  operation. 

With  this  new  line  in  operation,  we  can  look  for  a  great 
increase  in  trade  and  foreign  exchange  transactions  between 
the  United  States  and  the  Philippines,  China,  Japan,  India, 
as  well  as  writh  Australia,  New  Zealand  and  the  East  India 
Islands. 


214 


FOREIGN  EXCHANGE  TEXT  BOOK 


FOREIGN  EXCHANGE   BROKERS. 

At  the  principal  cities  will  usually  be  found  one  or  more 
individuals  or  firms  engaged  exclusively  in  the  buying  and 
selling  of  foreign  exchange,  including  commercial  and  bankers' 
bills  of  exchange,  cable  transfers,  etc.,  for  the  account  of  banks, 
exporters,  importers  and  others,  and  in  transacting  such  busi- 
ness do  so  upon  a  commission  basis.  Upon  large  transactions 
their  commission  is  as  small  as  1-32  of  1  per  cent  of  the  amount, 
and  sometimes  as  low  as  1-64  of  1  per  cent.  These  brokers 
keep  their  patrons  fully  informed  of  the  fluctuations  in  the 
rates  of  exchange  during  the  day  as  well  as  the  general  market 
conditions  and  have  the  confidence  of  those  for  whom  they 
transact  business  of  this  class. 

The  following  table  gives  the  brokerage  on  sums  of  $5,000 
to  $100,000,  at  1-64,  1-32,  1-16  and  1-8  of  1  per  cent: 


Amounts 

Brokerage  at 
1-64  of  1% 

Brokerage  at 
1-32  of  1% 

Brokerage  at 
1-16  of  1% 

Brokerage  at 

1-8  of  1% 

$    5,000  

$   0   78 

$    1.56 

$    3    12 

$  6  25 

10,000  

1    56 

3.  12 

6   25 

12   50 

15,000  

2   34 

4   69 

9   37 

18.75 

20,000  

3    12 

6  25 

12   50 

25.00 

25,000  

3  91 

7  81 

15   62 

31   25 

30,000  

4   69 

9   37 

18   75 

37   50 

35,000  

5  47 

10  94 

21   87 

43   75 

40,000  

6  25 

12  50 

25   00 

50  00 

45,000  

7  03 

14  06 

28   12 

56   25 

50,000  

7  81 

15   62 

31   25 

62   50 

55,000  

8  59 

17   19 

34   37 

68   75 

60,000  

9   37 

18   75 

37  50 

75  00 

65,000  

10   16 

20.31 

40  62 

81   25 

70,000  

10  94 

21   87 

43   75 

87  50 

75,000  
80,000  

11.72 
12   50 

23.44 
25  00 

46.87 
50  00 

93.75 
100  00 

85,000  

13   28 

26   56 

53   12 

106   25 

90,000  

14   06 

28   12 

56  25 

112  50 

95.000  
100.000  

14.84 
15   62 

29.69 
31   25 

59.37 
62  50 

118.75 
125  00 

JOBBERS  OF  FOREIGN  EXCHANGE  215 

JOBBERS  OF  FOREIGN  EXCHANGE. 

In  the  United  States  there  are  comparatively  few  jobbers 
of  foreign  exchange,  a  few  banks  and  bankers  in  New  York, 
Chicago,  and  one  or  two  other  cities  in  the  United  States,  and 
the  American  Express  Co.,  comprising  the  principal  ones. 

Their  method  of  conducting  the  business  is  to  furnish  to 
banks  and  sellers  of  foreign  exchange  a  list  of  their  correspond- 
ents abroad,  together  with  the  blanks  necessary  in  transacting 
the  business  with  the  public,  consisting  of  blank  forms  of  checks 
(see  Foreign  Checks,  page  152),  bearing  name  of  selling  bank, 
and  also  forms  for  effecting  payment  for  delivery  by  postoffice 
in  foreign  countries  at  points  where  there  are  no  banks  (see 
Foreign  Postal  Remittance  Blanks,  page  161).  Jobbers  then 
quote  to  banks  or  sellers  of  exchange,  as  frequently  as  the 
market  rates  change,  net  prices  at  which  they  will  sell  to  them 
exchange  on  the  various  foreign  countries.  The  retailers  to 
derive  a  profit  add  to  these  rates  whatever  amount  they  can 
obtain  from  purchasers  in  competition  with  other  sellers  of 
exchange.  The  checks  issued,  which  are  drawn  for  an  amount 
in  foreign  money  payable  by  one  of  the  correspondents  named 
in  the  list,  are  given  to  purchasers  to  mail  abroad.  The  retailer 
IMMEDIATELY  notifies  the  jobber  giving  number  of  check,  date 
of  issue,  amount  in  foreign  money,  place  of  payment,  etc.,  on 
a  printed  "advice"  form,  on  stub  of  check,  and  encloses  a 
check  payable  to  jobber  for  amount  due  based  upon  the  net 
rates  quoted  to  retailer.  The  jobber  thereupon  requests  his 
correspondent  abroad  to  pay  the  check  upon  presentation, 
which  the  foreign  bank  correspondent  does,  and  either  charges 
amount  against  the  jobbers'  account,  or,  in  case  it  is  at  a  small 
city  or  town  where  the  jobber' does  not  keep  funds  on  deposit, 
the  paying  bank,  by  previous  arrangement,  will  send  the  check 
for  credit  or  collection  to  some  other  bank  in  the  vicinity  where 
the  jobber  keeps  an  account. 

The  method  of  handling  of  foreign  postal  remittances  by 
retailers  through  jobbers  is  fully  explained  on  page  158. 

It  is  of  the  greatest  importance  that  banks  or  others  selling 
foreign  exchange  in  this  manner  deal  only  with  jobbers  having 
an  unquestionable  financial  standing,  since  in  the  sale  of  forms 
of  drafts  or  checks  to  the  public  bearing  their  name,  they  must 
assume  the  responsibility  to  the  customer  of  correct  payment, 
and  to  do  so  for  the  comparatively  small  margin  of  profit  they 
derive  on  such  transactions,  they  cannot  afford  to  run  any  risk 
of  failure  of  jobber  to  arrange  for  and  cause  correct  payment 
of  these  checks. 

On  next  two  pages  will  be  found  a  sample  of  the  usual  form 
of  net  quotation  sheets  furnished  by  jobbers  to  retailers  of  for- 
eign exchange.  (Exhibits  "Z"  and  " Z"  continued.) 


216 


FOREIGN  EXCHANGE  TEXT    BOOK 


Exhibit  "Z.» 

AMERICAN    EXPRESS    COMPANY. 

Treasurer's  Office,  65  Broadway,  New  York. 

BANKS   AND  BANKERS  SETTLEMENT  RATE  SHEET,   No..  1,  JAN.  11,  1905 

FOR  SALE  OF  CHECKS  ON  FOREIGN  COUNTRIES. 


lile  of  Specimen  Copy  of 

i  JOBBERS'  QUOTATIONS. 

I     tor  Checks 
|       under  $50 

$*>  to  $500 

$500  to  410,000 

Pounds  Sterling  

$4.87/2 

$4.87 

$4.863^ 

Turkish  Pounds  on  Harpoot, 

4.A8 

4.47 

4.47 

Turkish  Pounds  on  Turkey,  . 

4,52 

4.51 

4.50 

Francs,  -  .        

19.48  Cts. 

19.45  Cts. 

19.  42  Cts. 

Lei  on  Roumariia,    

19.62    " 

19.52     " 

19.42     " 

Kronen  on  Austria-Hungary, 

2035     " 

20.32    " 

20.30     " 

Finmarks  on  Finland  

19.40     " 

19.37     " 

19.35     " 

Lire,  paper,  on  Italy  

19.48     " 

19.45     " 

19.42     " 

Marks  on  Germany,        ,        ~ 

23.90     " 

23.87     " 

23.85     " 

Kroner  on  Norway  .Sweden  and  Denmark, 

26.88     '•• 

26.85     '• 

26.83     " 

(iulden  on  Holland.          .... 

40.30    " 

40.27     " 

40.25     " 

Pesos  on  Mexico,     .                       •  . 

5200    " 

5i  75     " 

51.50     " 

Pesos  on  Manila,      

50.50     " 

50.25     " 

50.10     " 

Dollars  (Local  Currency)  on  Hong  Kong,    . 

51.00     " 

50.75     " 

50.50    " 

Yen  (Local  currency)  on  Yokohama,  . 

51.00     " 

50.75     " 

50.50     " 

Rubles  on  Russia  and  Poland, 

51.75     " 

51.60    " 

51.50     " 

Rupees  on  India,      

33.70     " 

33.45      ' 

33.35     " 

Checks  in  U.  S.  DOLLARS,  on  Central  and  South  America,  Mexico,  U'est  Indies^. 
Cape  l''erde  Islands,  Hawaii,  and  Philippine  Islands,  %   of  j%  premium.  Minimum 
charge  for  a  Check  25  Cents. 

NOTE. — These  rates  are  net,  including  all  charges,  and  are  subject  to  change  at  any 
lime  by  notice  from  the  'freasitrer's  Office  oj  the  Company. 

Important  Checks  should  be  advised  by  telegraph,  if  there  is  any  likelihood  oj  advice 
reaching  Treasurer  after  mailing  of  Checks  abroad. 

Foreign  Remittances  at  above  rates,  adding  thereto  postage  charges  af  10  cents  for 
Great  Britain,  Germany,  Austria,  Norway  and  Sweden,  and  15  cents,  for  all  other- 
countries. 

Cable  Transfers  at  the  rates  and  cost  for  telegraphic  and  cable  service  mentioned  vr 
referred  to  on  back  hereof 

FOR  PURCHASE  OF  FOREIGN  EXCHANGE. 


Kor  Checks 
under  $5(10 

For  Checks 
$500  to$  10,000 

Sixty  Day  Bills 

HP  tosro.oco 

Pounds  Sterling,      

$4.81 

S4.85K 

$4.82 

Francs,      

5.21K 

5.I7K 

5.21'^ 

Marks  on  Germany. 

.94 

•  94« 

.94 

FOR  PURCHASE  AND  SALE  OF  FOREIGN  MONEY. 


We  purchase. 

We  sell 

OULD 

•  NOTES 

GOLD 

NOTKS 

Pounds  Sterling  (Sovereigns  (except  King  Georpe) 
&  Bank  of  Enplane!  Notes). 

$485 

S4.84H 

$4.87 

$4.87 

Francs  (Bank  ol  franco  Notes.  F  100  and  under), 

19.25  CIS 

19.20  Cts. 

19.55  Cts. 

19  40  Cts. 

Marks,  (Government  Notes,  M.  100  and  under). 

23.65    •• 

23.65    " 

23.82    " 

23  80    " 

Lire,  (Notes  of  100  and  under},     . 

19.25    " 

1945    •> 

Rubles,  (Notes  of  100  and  under). 

51,10     " 

4900    ." 

51.40    ". 

51.35    " 
26.95    - 

Kroner,  (Government  Notes), 

26.50    " 

Kronen,  (Notes  of  100  and  under). 

20.25    " 

20.45    " 

Canadian  Bank  Notes,          .            .    . 

Discount  \i  of  1% 

1                               : 

JOBBERS  OF  FOREIGN  EXCHANGE 


217 


Exhibit  "Z"— Continued 


IMPORTANT.  —  In  drawing  checks  the  Index  of  Countries  in  Company's 
.latest  List  of  Foreign  Paying  Agencies  should  be  consulted  to  determine  in  what 
standard  of  money  and  under  what  special  conditions  the  checks  are  to  be  drawn. 

Wherever  present  instructions  require  that  checks  be  drawn  at  "  Exchange 
on  "London,"  "Paris,"  "Berlin,"  "New  York,"  or  "Manila,"  change  the  phrase 
to  read  "At  buying  rate  for  checks  on  "London,"  "Paris,"  "Berlin," 
"New  York"  or  "Manila  " 

Drawing  Checks  in 
Dollars  Local  Currency,  Pesos,  Yen  and  Rupees. 

The  following  should  be  observed  in  filling  out  the  amounts  of  Checks 
mentioned  above  : 

I  -CHECKS  ON  HONG  KONG,  CHINA.  -DRAWN  IN  DOLLARS  LOCAL  CURRENCY. 
1  Dollar—  100  Cents. 

Three  Hundred  and 


ords  "  Local  Currency  "  must  be  entered  after  the 
•Dollars"  and  "Loc.  Cur."  in  the  square  as  shown. 


2-CHECKSON  MEXICO  AND  MANILA.  PHILIPPINE  ISLANDS. -DRAWN  IN  PESOS 


-CHECKS  ON  YOKOHAMA,  JAPAN.  -DRAWN  IN  YEN. 


1  Yen—  100  Sen. 
Kinety  and    8       Ten 


4.-CHECKS  ON  INDIA  (BRITISH).-DRAWN  IN  RUPEES 

1  Rupee—  16  Annas.   1    Anna—  12  Pies. 
Th'rte  Hundred  Rupees,  Twelve  A  nnas.  Seven  pie». 


TRANSFER    OF    MONEY    BY    CABLE. 

The  settlement  rate  of  exchange  for  Cable  Transfers  is  usually  '/t  per  cent,  above  that  for  Foreign  Checks 
quoted  on  opposite  side,  minimum  50  cents,  to  which  should  be  added  the  actual  cost  of  the  cable  service/    * 
Banks  and  Bankers  are  requested  to  kindly  telegraph  or  write  for  special  rates  on  large  Transfers. 

The  full  name  and  address  of  payee  must  always  be  furnished  Cable  Transfers  payable  to  Bank*.  Bankers, 
etc  .  sh"u1d  state  "for  whose  account"  the  transfers  are  made  Transfers  sent  to  a  person  In  care  of  any  one. 
else  will  be  paid  to  the  payee  only.  A  Registered  address  must  not  be  used  unless  same  has  been  previously 
arranged  with  the  Treasurer. 

Following  Is  a  list  of  Cities  to  which  this  Company  can  cable  direct  through  exclusive  Agents  or 
Banking  Houses 

CABLE     CHARGES     PER     WORD     FROM     NEW     YORK. 


Alexandria.  Egypt  
Amsterdam.  Holland... 
Antwerp.  Belgium  
Athens,  Greece  
Barbadoes,  West  Indies 
Belfast,  Ireland  t 
Berlin,  Germany  
Bremen,  Germany  
Buenos  Ayres,  Argentine 
S  A    

80 

25 
• 
»« 

9! 
• 
• 
20 

1  no 

Florence,  Italy  
Genoa,  Italy  
Georgetown,  Br.Guia 
c.lasgow,  Scotland.  .  . 
Guatemala,    Guatem: 
C.A  
Hamburg,  Germany.. 
Hamilton,  Bermuda 
Havana,  Cuba...   :... 
Havre,  France  

...    31 
...    31 
la   1.44 
...   -SB 
la. 
...    5S 
...    25 
..    42 
...    15 
...    25 

London,  England  25 
Managua,  Nicaragua.C.  A  7ft 
Manila.  Phil.  Islands.  ..1.  lit 
Marseilles.  France  25 
tMexico  City,  Mexico.  .    1  75 
Montevideo.     Uruguay, 
S.  A  1.00 
Munich,  Germany  25 
Naples.  Italy  ;..    81 
Nassau,  Bahamas  35 

SanJuan.PortoRico.W.I.    7S 
San  Salvador,  San  Salva- 
-dor.C.  A  n 
Santiago,  Chili,  S.  A.  ...1.25 
Santiago,  Cuba  20 
Southampton,  England..  25 
Stockholm,  Sweden...  :    38 
Tegucigalpa,    Honduras. 
C.  A....  •«& 
Valparaiso.  Chili,  S.  A.  ..1.25 

Cairo,  Egy  pt  
Christiania,  Norway.... 
Copenhagen.  Denmark. 
Cork,  Ireland  
Dresden,  Germany  
Dublin  Ireland          .     . 

50 

3f> 
V, 
V, 
V> 
2."> 

Hong  Kong,  China... 
Honolulu,  Hawaii  Is 
•juneau,  Alaska  .... 
Kingston,  Jamaica,  V 
Larnaca.  Cyprus  
Lima,  Peru,  S.  A  

...1.2* 

...    47 
.  .  .2.70 
/.  I   48 
...    68 
...1.25 

Paris,  France  ,    *5 
Panama  17 
Rome.  Italy  SI 
Rotterdam,  Holland.  ...    25 
Santo  Domingo,  W.  I...  1.3* 
St.  Petersburg,  Russia..    4-1 

Venice  Italy  81 
Vienna,  Austria  S» 
Warsaw,  Russia  43 
Wiborg,  Finland  .'....« 
Wilna.  Russia  45 

Edinburgh,  Scotland... 

26 

Liverpool,  England.  . 

...   25 

San  Jose.  CoataRica,  C.A.   75 

Zurich.  Switzerland  30 

•For  ten  words  or  less  in  Text ;  24  cents  for  each  additional  word. 

fFor  ten  words  or  less  in  Text ;  1*  cents  each  additional  word. 

Cable  Transfers  for  places  not  on  above  list  will  be  forwarded  by  mall  froi 
especially  instructed.  Transfers  will  be  forwarded  by  telegraph  beyond  points  < 
that  all  charges  are  to  be  borne  by  the  remitter  or  payee. 

It  is  usual  to  figure  on  nine  words  to  each  message,  but  that,  of  course,  depends  entirely  upon  the  length  of  the 
Payee's  address  By  a  system  of  registration  of  the  address,  the  cable  charge  on  succeeding  Trausf  crs  to  same  party 
•nay  be  reduced  considerably. 


the  nearest  point  unless  otherwise 
above  list  upon  the  understanding 


218 


FOREIGN  EXCHANGE  TEXT  BOOK 

Exhibit  "AA" 

Reduced  Facsimile  of 

EXPRESS  MONEY  ORDER. 


FOREIGN  EXCHANGE  PROFIT  TABLE 


2!  9 


rOREIGN  EXCHANGE  RETAILERS'  GUIDE  TO  PROFIT. 

Table  for  figuring  profit  011  sales  of  foreign  exchange  or  money,  cf  any  country,  where  the  rate  quoted  is  per  single 
unit,  i.  e.,  so  many  cents  per  franc,  mark,  kronen,  kronor,  gulden,  ruble,  etc.  Figures  at  left  margin  represent  the  quantity 
from  10  to  10,000,  francs,  marks,  etc.  Figures  across  the  top  show  number  of  points  to  add  to  cost  rate.  Example: 
Customer  wants  draft  for  700  kronor.  Cost  rate  is  26.  90  cents  per  kronor.  Follow  along  line  opposite  700  until  you  reach 
the  amount  of  profit  you  want,  say  50  cents,  the  figures  at  top  above  49  cents,  show  you  should  add  7  points  to  cost  rate, 
making  selling  rate  26.  97  cents.  This  table  cannot  be  used  for  francs  per  $1  .  00  or  marks,  per  4  marks  or  pounds  sterling. 

(TO  ) 

sjuiod 

odi 

rH    rvj    00   f    >O 

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co  r~-  x  os  o 

8888 

O  O  O  O  O 

o  o  o  o  o 

OOOO'OOOOO 
OOOO    OOOOO 

~ 

C^  CO  -^  IO 

co  r^  oo  os  o 

CN  CO  ^p  iO 

§°§88 

(osoo  •  ) 

sjutod 
OS 

*O  O  lO  O  *O 
O  1-1  i-i  IN  (M 

o  *o  o  *o  o 

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iO  CO  ^O    CO  *O  CO  10  CO    CO  O  CO  O 

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OOOO 

rHrHCNCNCOCOTfiTTlO 

1 

o  »o  o  »o 

•—I    rH    CN   CN 

OOOO 
O  iO  O  iO 

0*00*00 
co  co  T  -r  *O 

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& 

*O  O5  rt»  X  CO 

0  0  rH  ,H  IN 

C^l  CO  CO  ^*  ^ 

O5  CO  X  CN 

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C^  CO  CO  -f  TJI 

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THE  TRAVELERS'  GUIDE  221 

THE  TRAVELERS'  GUIDE. 

The  following  tables  give  the  gold  and  silver  coins  of  the 
United  States  and  principal  European  countries  with  their 
comparative  value  in  the  money  of  the  other  countries,  such 
value  being  based  upon  the  intrinsic  value  of  the  gold  unit  of 
the  countries  named,  as  declared  by  the  Director  of  the  United 
States  mint,  as  follows:  $4.8665  to  the  pound  sterling  of  Great 
Britain,  $0.193  to  the  franc  of  France,  Belgium  and  Switzerland, 
the  finmark  of  Finland,  the  drachma  of  Greece,  the  lira  of  Italy, 
the  lei  of  Roumania,  the  dinar  of  Servia  and  the  peseta  of  Spain; 
$0.238  to  the  mark  of  Germany;  $0.203  to  the  kronen  of 
Austria-Hungary;  $0.268  to  the  kroner  of  Norway,  Sweden 
and  Denmark;  $0.402  to  the  florin  or  gulden  of  Holland  (the 
Netherlands);  $0.515  to  the  ruble  of  Russia;  $1.00  to  the 
dollar  of  the  United  States. 

It  should  be  understood  that  the  values  given  are  for  com- 
parative purposes  only  and  do  not  represent,  in  case  of  silver, 
the  actual  or  intrinsic  values,  since  silver  coins  in  other  countries 
would  generally  be  worth  only  their  bullion  value. 

The  values  as  given  will,  however,  give  to  travelers  a 
general  idea  of  the  value  of  the  coins  of  one  country  in  the  money 
of  the  other  countries  and  perhaps  aid  them  in  securing  a  fair 
equivalent  in  exchange  for  their  money. 

The  traveler  in  Europe  will  find  these  tables  very  convenient 
for  reference  when  exchanging  the  gold  and  silver  coins  of  one 
country  into  the  money  of  the  other  countries.  For  illustration: 
If  upon  your  arrival  in  Paris  from  London  you  still  have  in  your 
possession  several  gold  English  sovereigns  or  pounds,  the  table 
will  show  you  should  receive  very  nearly  if  not  fully  25  francs 
and  20  centimes,  less  whatever  charge  may  be  made  by  bank  or 
money  changer  for  service  in  exchanging  the  money  for  you. 

In  giving  the  equivalent  of  coins  in  the  money  of  countries 
on  the  continent,  fractions  of  5  are  disregarded  for  the  reason 
the  gold  and  silver  coins  of  these  countries  are  usually  in  multiples 
of  5. 


222 


FOREIGN  EXCHANGE  TEXT  BOOK 


NAMES  OF  COINS 

AND 

COUNTRIES. 

Value  in  money 
of 
United  States. 

Value  in  money 
of 
Great  Britain. 

Value  in  money 
of 
France  &  other 
c'tries  named. 

Value  in  money 
of 
Germany. 

Value  in  money 
of 
Austria-Hung. 

Value  in  money 
of 
Holland. 

Value  in  money 
of 
Norway,  Swed., 
Denmark. 

Value  in  rnone  v 
of 
Russia. 

§  B 

^     £   "3 

•-.'       m 
fa      O 

&    « 

S    fa 

8    13 

W    £ 

1  s' 

kg     g 

X     0 

ji     a 

3       C 

eS    US 

United  States. 
Double     Eagle  ($20), 
gold  

20.00 
10.00 
5.00 

2.50 
1.00 
.50 
.25 
.10 

4.  2.  2 
2.   1.   1 
1.  0.  7 

10.  4 
•    4.   1 
2.  1 
1.  0 
5 

103.65 
51.80 
25.90 

12.95 
5.20 
2.60 
1.30 
.50 

84.00 
42.00 
21.00 

10.50 
4.20 
2.10 
1.05 
.40 

98.50 
49.25 
24.65 

12.30 
4.95 
2.45 
1.25 
.50 

49.75 
24.85 
12.45 

6.20 
2.50 
1.25 
.60 
.25 

74.65 
37.30 
18.65 

9.35 
3.75 
1.85 
.95 
.40 

38.85 
19  40 
9.70 

4.85 
1.95 
1.00 
.50 
.20 

Eagle  ($10),  gold  .... 
Half  Eagle  ($5),  gold. 
Quarter  Eagle  ($2£), 
gold  .  . 

Dollar,  silver  

Half  Dollar,  silver  .  .  . 
Quarter  Dollar,  silver. 
Dime,  silver  

Great  Britain. 
5  Pounds,  gold  

24.33 
9.73 
4.87 
2.43 
1.22 
.61 
.49 
.24 
.12 
.08 
.06 

5.  0.  0 
2.  0.  0 
1.  0.  0 
10.  0 
5.  0 
2.  6 
2.  0 
1.  0 
6 
4 
3 

| 

126.05102.25119.85   60.50  90.80 
50.40  40.90   47.90  24.20  36.30 
25.20  20.45  24.00   12.19   18.15 
12.60   10.20   12.00     6.05     9.05 
6.30     5.10!     6.00     3.05     4.55 
3.15     2.60     3.00     1.50     2.25 
2.55     2.05     2.40     1.20     1.85 
1.25     1.00;     1.20        .60         90 
.65        .50       .60        .30         45 
.40       .35        .40        .20        .30 
.30       .25       .30        .15       .20 

47.25 
18.90 
9.45 
4.75 
2.40 
1.20 
.95 
.45 
.25 
.15 
.10 

2  Pounds,  gold  

Sovereign,  gold  

Half  Sovereign,  gold.  . 
Crown  (  5s)  ,  silver  .... 
Half  Crown,  silver  .  .  . 
Florin  (2s),  silver  .... 
Shilling,  silver  

6  Pence,  silver  

4  Pence,  silver  

3  Pence,  silver  

France,  etc. 
100  Francs,  gold  

19.30 
9.65 
3.86 
1.93 
.96 
.96 
.39 
.19 
.10 
.04 

3.19.  4 
1.19.  8 
15.10 
7.11 
3.11 
3.11 
1.  7 
10 
5 
2 

100.00 
50.00 
20.00 
10.00 
5.00 
5.00 
2.00 
1.00 
.50 
.20 

81.10 
40.55 
16.20 
8.10 
4.05 
4.05 
1.65 
.80 
.40 
.20 

95.05  48.00   72.00 
47.50  24.00   36.00 
19.00     9.60   14.40 
9.50     4.80     7.20 
4.70     2.40     3.60 
4.70     2.40     3.60 
1.90     1.00     1.45 
.95        .50       .70 
.50       .25        .35 
.20       .10        .15 

37.50 
18.75 
7.50 
3.75 
1.85 
1.85 
.75 
.35 
.20 
.10 

50  Francs,  gold  

20  Francs,  gold  

10  Francs,  gold  

5  Francs,  gold  

5  Francs,  silver  

2  Francs,  silver  

1  Franc,  silver  

50  Centimes,  silver.  .  . 
20  Centimes,  silver.  .  . 

Holland. 
10  Gulden,  gold  

4.02 
1.00 
.40 
.20 
.10 
.04 
.02 

0.16.  6 
4.  1 
1.  8 
10 
5 
2 
1 

20.85 
5.18 
2.05 
1.05 
.50 
.20 
.10 

16.90   19.80 
4.20     4.95 
1.70     1.95 
.85     1.00 
.40       .50 
.20       .20 
.10       .10 

10.00   15.00 
2.50     3.75 
2.00      1.50 
1.00        .75 
.25        .35 
.10        .15 
.05        .07 

7.80 
1.95 
.80 
.40 
.20 
.10 
.04 

Rix-daler,  silver  

Florin,  silver  

Half-  Florin,  silver  .  .. 
25  Cents,  silver  

10  Cents,  silver  

5  Cents,  silver  

THE  TRAVELERS'  GUIDE 


223 


NAMES  OF  COINS 

AND 

COUNTRIES. 

Value  in  money 
of 
United  States. 

Value  in  money 
of 
Great  Britain. 

Value  in  money 
of 
France  &  other 
c'tries  named. 

Value  in  money 
of 
Germany. 

Value  in  money 
of 
Austria-Hung. 

Value  in  money 
of 
Holland. 

Value  in  money 
of 
Norway,  Swed., 
Denmark. 

Value  in  money 
of 
Russia. 

"o      "j 

Q    o 

=fl     A  T3 

u       g 
fa     O 

•3    if 

s   £ 

B   i, 

W    E 

3    $ 

o   6 

£'    % 
W   o 

.a     d 

3       C 

«    W 

Germany. 
20  Marks,  gold  
10  Marks,  gold  

4.76 
2.38 
1.19 
.71 
.48 
.24 
.12 

0.19.  7 
9.  9 
4.11 
2.11 
2.  0 
1.  0 
6 

24.65 
12.30 
6.15 
3.70 
2.50 
1.25 
.65 

20.00 
10.00 
5.00 
3.00 
2.00 
1.00 
.50 

23.45 
11.70 
5.85 
3.50 
2.35 
1.20 
.60 

11.85;  17.75 
5.95     8.90 
2.95     4.45 
1.75     2.65 
1.20!     1.80 
.60       .90 
.30       .45 

9.25 
4.60 
2.30 
1.40 
.95 
.50 
.25 

5  Mark,  silver  
3  Marks,  silver  

2  Marks,  silver  

1  Mark,  silver  

50  Pfennigs,  silver  .  .  . 

Austria-Hungary. 
4  Ducats  gold  

9.15 
4.05 
2.29 
2.03 
1.01 
.81 
.41 
.20 
.10 
.08 
.04 

1.17.  8 
16.  8 
9.  5 
8.  4 
4.  2 
3.  4 
1.  8 
10 
5 
4 

a 

47.40 
21.00 
11.85 
10.50 
5.25 
4.20 
2.10 
1.05 
.50 
.40 
.20 

38.45 
17.00 
9.65 
8.55 
4.25 
3.40 
1.70 
.85 
.40 
.35 
.20 

45.10 
19.95 
11.30 
10.00 
5.00 
4.00 
2.00 
1.00 
.50 
.40 
.20 

22.75 
10.05 
f  70 
5.05 
2.50 
2.00 
l.CO 
.50 
.25 
.20 

•I0 

34.15 
15.10 
8.55 
7.55 
3.80 
3.00 
1.55 
.75 
.40 
.30 

> 

17.75 
7.85 
4.45 
3.95 
1.95 
1.60 
.80 
.40 
.20 
.15 
.10 

20  Crowns  gold  

1  Ducat  gold      .... 

10  Crowns  gold 

5  Crowns  silver 

2  Florins,  silver  

1  Florin,  silver  

1  Crown,  silver  

\  Florin,  silver  

20  Kreutzers,  silver  .  . 
10  Kreutzers,  silver  .  . 

Norway-Sweden. 
20  Crowns,  gold  

5.36 
2.68 
1.34 
.54 
.27 
.13 
.11 
.07 
.03 

1.  2.  0 
11.  0 
5.  6 
2.  3 
1.  2 
7 
6 
4 
2 

27.75 
13.85 
6.95 
2.80 
1.40 
.65 
.55 
.35 
.15 

22.50 
11.25 
5.65 
2.30 
1.15 
.55 
.45 
.30 
.15 

26.40 
13.20 
6.60 
2.65 
1.35 
.65 
.55 
.35 
.15 

13.35 
6.65 
3.35 
1.35 
.65 
.30 
.25 
.15 
.05 

20.00 
10.00 
5.00 
2.00 
1.00 
.50 
.40 
.25 
.10 

10.40 
5.20 
2.60 
1.05 
.50 
.25 
.20 
.15 
.05 

10  Crowns,  gold     .... 

5  Crowns  gold  .      ... 

2  Crowns  silver  

1  Crown,  silver  .  . 

50  Ores,  silver  

40  Ores,  silver  

25  Ores,  silver  

10  Ores,  silver  

Russia. 

Imperial  (15  R),  gold. 
10  Rubles,  gold.  ..... 

7.72 
5.15 
3.86 
2.57 
.52 
.26 
.13 
.10 
.08 
.05 
.03 

1.11.  9 
1.  1.  2 
15.10 
10.  7 
2.  2 
1.  1 
7 
5 
4 
3 
2 

40.00 
26.70 
20.00 
13.30 
2.70 
1.35 
.65 
.50 
.40 
.25 
.15 

32.40 
21.65 
16.20 
10.80 
2.20 
1.10 
.55 
.40 
.35 
.20 
.15 

38.00 
25.35 
19.00 
12.65 
2.55 
1.30 
.65 
.50 
.40 
.25 
.15 

19.20 
12.80 
9.60 
6.40 
1.30 
.65 
.30 
.25 
.20 
.10 
.05 

28.80 
19.20 
14.40 
9.60 
1.95 
.95 
.'50 
.35 
.30 
.20 
.K 

15.00 
10.00 
7.50 
5.00 
1.00 
.50 
.25 
.20 
.15 
.10 
.05 

Jimp.  (7J  R),gold.  .  . 
5  Rubles  gold  

Ruble,  silver  

Half  Ruble,  silver  .  .  . 
25  Kopecks,  silver  .  .  . 
20  Kopecks,  silver  .  .  . 
15  Kopecks,  silver  ..  . 
10  Kopecks,  silver  .  .  . 
5  Kopecks,  silver  .... 

224  FOREIGN  EXCHANGE  TEXT  BOOK 

FRACTIONS  EXPRESSED  DECIMALLY. 

English,  French,  German,  Holland  and  sometimes  Italian 
exchange  quotations  are  frequently  expressed  in  fractions  of  the 
unit,  which  must  be  converted  to  the  decimal  in  order  to  figure 
same,  and  unless  one  is  constantly  using  such  fractions  it  is 
quite  confusing  to  the  mind  to  immediately  determine  what  the 
decimal  of  a  fraction  is.  We  therefore  give  below  the  fractions 
of  100  by  sixty-fourths,  with  the  decimal  of  same. 


1-64=.  015625 
1-32=.  03125 
3-64=.  0468?  5 
1-16=.  0625 

33-64=.  515625 
17-32=.  53125 
35-64=.  546875 
9-  16=.  5625 

5-64=.  078125 
3-32=.  09375 
7-64=.  109375 
1-8  =.125 

37-64=.  578125 
19-32==--.  59375 
39-64=.  609375 
5-8  =.625 

9-64=.  140625 
5-32=.  15625 
,  11-64=.  171875 
3-  16=.  1875 

41-64=.  640625 
21-32=.  6562^ 
43-64=.  671875 
11-  16=.  6875 

13-64=.  203125 
7-32=.  21875 
15-64=.  234375 
1-4  =.25 

45-64=.  703125 
23-32=.  71875 
47-64=.  734375 
3-4  =.75 

17-64=.  265625 
9-32=.  28125 
19-64=.  296875 
5-16=.  3125 

49-64=.  765625 
25-32=.  78125 
51-64=.  796875 
13-16=.  8125 

21-64=.  238125 
11-32=.  34375 
23-64=.  359375 
3-8  =.375 

53-64=.  828125 
27-32=.  84375 
55-64=.  859375 

7_8  =.875 

25-64=.  390625 
13-32=.  40625 
27-64=.  421875 
7-  16=.  4375 

57-64=.  890625 
29-32=.  90625 
59-64=.  921875 
15-  16=.  9375 

29-64=.  453125 
15-32=.  46885 
31-64=.  484475 
1-2  =.50 

61-64=.  953125 
31-32=.  96875 
63-64=.  984375 
1=.100 

ILLUSTRATION: 
(per  4  marks). 


Express    decimally    the    rate    94  15-16 
ANSWER — .949375  cents. 


BROOKS    FOREIGN  EXCHANGE  TEXT  BOOK  225 


In  the  preparation  of  this  work,  it  has  been  the  con- 
stant aim  of  the  author  to  present  the  subject  matter  in 
a  readable  manner  free  from  all  technical  terms  and 
phrases,  and  he  hopes  that  his  efforts  in  this  direction  may 
attain  and  merit  success. 

The  chief  object  has  been  to  place  before  the  public 
an  elementary  work  embracing  the  essentials  requisite  to  a 
thorough  understanding  of  the  basic  principles  upon  which 
foreign  exchanges  are  built.  He  has  purposely  omitted 
furnishing  data  relative  to  opening  and  conducting  ac- 
counts in  the  books  of  foreign  bankers  for  the  reason 
that  the  student  and  layman  would  find  this  to  be  a  sub- 
ject in  a  class  by  itself,  very  ably  treated  upon  in  Margraff's 
International  Exchange,  which  we  are  pleased  to  recom- 
mend to  those  desiring  a  more  advanced  knowledge  of 
the  intricacies  of  Foreign  Exchange. 


INDEX. 


Abassi — see  money  of  Persia 41 

Abyssinia — money  of 46 

Acceptance  for  honor 179 

Acceptance — meaning  of 179 

Actual  rate  of  exchange 121,  122 

Advice — meaning  of 180 

Afghanistan — money  of 38.  69 

African  countries — money  of 43-46 

After  sight — meaning  of 180 

Agreement  for  circular  letter  of  credit 146 

Agreement  for  commercial  letter  of  credit 176 

Alaska — money  of 49 

Algerian  exchange — conversion  of 112 

Algeria — money  of 12,  43 

Allonge — meaning  of 180 

Alphonsino — see  money  of  Cuba 57 

Altilik — see  money  of  Turkey 31 

American  Express  Co.,  Travelers'  Cheques 153-156 

Amsterdam  florins — quotations  for 119 

Andora — money  of 12,  69 

Anguilla — money  of 55 

Anna — see  money  of  British  India 32 

Antiguay — money  of 9 

Antwerp  francs — quotations  for • 1 19 

Appendix 211 

Arabia — money  of 69 

Arbitration  of  exchange — with  examples 135-138 

Argentine  Republic  exchange — conversion  of Ill 

Argentine  Republic — money  of 59 

Argentina — see  money  of  Argentine  Republic 60 

Ascension — money  of 9 

Asiatic  countries — money  of 32 

Aspes — see  money  of  Turkey 30 

Atlantic  Ocean  Islands — money  of 55 

At — see  money  of  Siam 41 

Australian  exchange — conversion  of Ill 

Australia — money  of 8,  46 

Austria-Hungary  exchange — conversion  of 93 

Austria-Hungary — money  of 21 

Austria-Hungary  exchange — quotations 116 

B 

Bahama — money  of 55 

Balboa — see  money  of  Panama 53 

Baluchistan — money  of 38 

Bani — see  money  of  Roumania 26 

Bankers'  reimburse  bills 192 

Bankers'  sight  drafts — quotations  for. . : 117,  118 

Bankers'  60  and  90  day  sight  drafts — quotations  for 117 

Bank  notes 5 

Bank  of  England  official  minimum  discount  rate 190 

Bank  post  remittances 158-161 

Barbadoes — money  of 55 

226 


INDEX  22? 

B — continued 

Bat — see  money  of  Siam 44 

Becklik — see  money  of  Turkey 31 

Belgium  exchange — conversion  of 81 

Belgium — buying  bills  of  exchange  on 201 

Belgium — money  of 10,  12 

Berlin  exchange  quotations 120 

Berlin  reichsmarks — quotations  for 118 

Bermuda  Islands — money  of 55 

Bill  of  exchange — foreign  commercial 166-172 

Bill  of  exchange — meaning  of 180 

Bill  of  exchange — parties  to  and  their  responsibility 193 

Bills  of  exchange — buying  of 163,  189-210 

Bills  of  exchange  drawn  on  outside  English  points 198 

Bill  of  lading — through 169 

Bolivar — see  money  of  Venezuela 68 

Bolivia  exchange — conversion  of Ill 

Bolivia — money  of 60 

Boliviano— see  money  of  Bolivia Ill 

Brazilian  exchange — conversion  of 102-105 

Brazil — money  of :  .  .  .  61 

British  Guiana — money  of 60 

British  Honduras  exchange — conversion  of '.  .  .  112 

British  Honduras — money  of 52 

British  India  exchange — conversion  of. 101,  202 

British  India — money  of 32 

British  possessions 9 

Brokerage  table 214 

Brokers — -foreign  exchange 214 

Bulgarian  exchange — conversion  of 106 

Bulgarian  exchange — quotations 114 

Bulgaria — money  of : 15 

Bullion— standard 69,  70 

Burmah — money  of 32 

Buying  bills  of  exchange  on  Belgium  and  Switzerland 201 

Buying  bills  of  exchange  on  France 199-203 

Buying  bills  of  exchange  on  Germany 203-206 

Buying  bills  of  exchange  on  Great  Britain 194-199 

Buying  bills  of  exchange  on  Holland 206-209 

Buying  foreign  commercial  bills  of  exchange 189-210 

c 

Cable — the  use  of,  in  foreign  exchange  transactions 212 

Cable — transfers  of  money ,._, 157 

Cable  transfers — quotations  for 118 

Canada — money  of 47 

Candareen — see  money  of  China 34 

Cape  Colony  exchange — conversion  of 112 

Cape  Colony — money  of 55 

Cape  of  Good  Hope — money  of 8,  9 

Cape  Verde  Islands — money  of 55 

Cash — see  money  of  China 34 

Cause  of  fluctuation  in  rate  of  exchange 123 

<2entavo  (cents) — see  money  of  Philippines,  Mexico,  British 
Honduras,  Gautemala,  Honduras,  Nicaragua,  Salvador, 
Cuba,  Ecuador,  Peru,  Uruguay,  Venezuela,  Argentine 
Republic,  Bolivia  and  Chile.  (For  page  numbers  see 
countries  named.) 

Centesimi — see  money  of  Italy 14 


228  FOREIGN  EXCHANGE  TEXT  BOOK 

C — continued 

Centimes — see    money    of    France,    Belgium,    Switzerland    and 

Algeria.     (For  page  numbers  see  countries  named.) 
Centime — see  money  of  Spain,  Costa  Rico  and  Cuba.     (For  page 
numbers  see  countries  named.) 

Central  American  countries — money  of 52 

Central  American  exchange — conversion  of 112 

Central  American  exchange  quotations 116 

Cents — see  money  of  Holland,  China,  Ceylon,  Indo-China, 
Canada,  United  States,  Alaska,  New  Foundland,  Haiti, 
Porto  Rico,  Colombia,  Santo  Domingo.  (For  page  num- 
bers see  countries  named.) 

Certificates  of  deposit  for  gold  rnd  silver 5,  190 

Certificate  of  insurance 170 

Ceylon — money  of 38 

Chais — see  money  of  Persia 41 

Checks — crossed  sterling 198 

Checks— foreign 150-152 

Checks — foreign  limited 162 

Channel  Islands — money  of 9 

Cheques — travelers' 153,  154 

Chile — money  of 62 

Chilean  exchange — conversion  of Ill 

China — money  of 34 

Chinese  exchange — conversion  of 98 

Circular  letter  of  credit 139-146 

Circular  letter  of  credit — agreement  for 141,  146 

Circular  letter  of  credit — draft  drawn  against  same 139,  144 

Circular  letter  of  credit — facsimile  of 142,  149 

Circular  letter  of  credit — guaranty : 141,  145 

Circular  letter  of  credit — used  with  letter  of  indication 147-149 

Clean  bills 191 

Clearing  houses 3 

Coinage  of  gold -.  .  .  70 

Coinage — sixteen  to  one — meaning  of 69 

Coins— gold  and  silver — how  value  is  fixed 6 

Coins — value  of  per  ounce 70 

Coins— weights  of  United  States  coins 49 

Collateral  security  contract 156 

Colombia — money  of 63 

Colombian  exchange — conversion  of Ill 

Colon — see  money  of  Costa  Rico 53 

Commercial  bill  of  exchange 166-172 

Commercial  forms — foreign 139-177 

Commercial  letter  of  credit 173-177 

Commercial  letter  of  credit — agreement  for 176 

Commercial  letter  of  credit — trust  receipt 177 

Commercial  par  of  exchange 132,  133 

Commercial  sight  drafts— quotations  for 118 

Comora  Islands — money  of 12 

Conditional  indorsements 188 

Condor — see  money  of  Chile  and  Colombia 63,  64 

Congo  Free  State — money  of 46 

Congo  States — money  of 69 

Continental  drafts — quotations  for 118 

Continental  exchange — meaning  of 181 

Conto — see  money  of  Portugal  and  Brazil 25,  62 

Conversion  of  foreign  money  into  United  States  money  and  vice 

versa 75 

Copecks — see  money  of  Russia 22 


INDEX  229 

C — continued 

Costa  Rico  exchange — conversion  of 112 

Costa  Rico — money  of 53 

Cowries — see  money  of  Siam .     41 

Credit  balances  abroad 193 

Crossed  sterling  check 198 

Crown — see  money  of  Great  Britain,  Norway,  Sweden,  Den- 
mark, Austria-Hungary  and  Portugal.  (For  page  numbers 
see  countries  named.) 

Cuba — money  of 57 

Currency  of  a  bill — meaning  of 181 

Cypress — money  of 9 

D 

D-A  and  D-P — meaning  of  abbreviations 181 

Danish  money — conversion  of 92 

Danish  exchange — quotations 116 

Dating  French  checks  and  bills 203 

Days  of  grace — foreign  countries 193 

Decimals  for  fractional  French  rates 201 

Decimals  for  fractional  German  rates 204 

Decimals  for  fractional  Holland  rates 208 

Decimals  of  fractions 224 

Decimo — see  money  of  Colombia 64 

Demand  exchange — meaning  of 182 

Denmark — money  of 20 

Dime — see  money  of  the  United  States 47 

Dinar — see  money  of  Servia 28 

Dinero — see  money  of  Peru 66 

Direct  and  indirect  exchange — meaning  of 182 

Director  of  the  United  States  mint 6,  127 

Discount  rates  at  London,  Paris,  Berlin,  etc 119,  123 

Discount  rates  on  English  bills 198 

Discount  rate — Bank  of  England 190 

Discount  rate  table — French  exchange 202 

Discount  rate  table — German  exchange 205 

Discount  rate  table — Holland  exchange 209 

Discount  rate  table — Sterling  exchange 197 

Discount  rates — how  they  affect  rates  here 124 

Discount  rates — private 191 

Documentary  bills  of  exchange ' 166 

Documents  for  acceptance 190,  191 

Documents  for  acceptance — meaning  of 181 

Documents  for  payment.  .  . 190,  191 

Documents  for  payment — meaning  of 181 

Documents  for  payment — quotation  for 118 

Dollar — see    money    of    China,    Canada,    United    States,    New 

Foundland,    Santo     Domingo,    Porto    Rico,    Alaska,    and 

Colombia.     (For  page  numbers  see  countries  named.) 

Dollar  exchange — meaning  of 182 

Dollars — local  currency — see  money  of  Hong  Kong,  China,  and 

Philippines.      (For  page  numbers  see  countries,  named.) 

Domestic  exchange — meaning  of 182 

Dominica — money  of 9 

Domiciled — meaning  of 182 

Doubloon — see    money   of   Guatemala    etc.,   Cuba,    and   Chile. 

(For  page  numbers  see  countries  named.) 

Drachma — see  money  of  Greece 17 

Draft — drawn  against  circular  letter  of  credit 144 


230  FOREIGN*  EXCHANGE  TEXT  BOOK 

D — continued 

Draft — drawn  against  foreign  shipment 171 

Draft — explanation  of 182 

Draft— foreign 150-152 

Ducat — see  money  of  Austria-Hungary 21 

Dull  exchange 117 

Dutch  East  Indies  exchange — conversion  of 112 

Dutch  East  Indies — money  of 39,  46 

E 

Eagle — see  money  of  the  United  States 47 

East  Indies  Islands — money  of 39 

Ecuador  exchange — conversion  of Ill 

Ecuador — money  of 64 

Ecus — see  money  of  France 12 

Egyptian  exchange — conversion  of, 112 

Egyptian  pound — see  money  of  Egypt 43 

Egypt — money  of 43 

English  bills  of  exchange — indorsements  of 198 

English  checks — crossed 198 

English  exchange — quotations  for 113-116 

English  money — conversion  of 75-80 

English  money — table  of 75 

Eritrean  dollars — see  money  of  Abyssinia  and  Eritrea 46 

Eritrea — money  of 46 

Escudo — see  money  of  Chile. 63 

European  countries — money  of 7 

Exchange — arbitration  of 135-138 

Exchange  centers  of  foreign  countries 3 

Exchange — direct  and  indirect 182 

Exchange — firm,  steady,  strong,  weak  and  dull 117 

Exchange — first,  second  and  third  of 181,  183 

Exchange — mint  par  of 127 

Exchange — pars  of 127 

Exchange — quotations  for 113 

Exchange  rates 121 

Exchange  transactions 179-187 

Exchanging  of  money  between  countries 179-187 

Exporters — competition  with  foreign  manufacturers 3 

Exporters — how  interested  in  foreign  balances 2 

Exports — value  of  in  1905 2 

Express  money  orders 218 

F 

Falling  rate  of  exchange 121 

Farthing — see  money  of  Great  Britain 7 

Fen — see  money  of  China 34 

Fiji  Islands — money  of 24 

Finland — money  of 24 

Finmark — see  money  of  Finland 24 

Finnish  exchange — conversion  of 108,  109 

Finnish  exchange — quotations  for 116 

Firm  exchange 117 

First  of  exchange 181,  183 

Fixed  rate  of  exchange 121 

Florin — see  money  of  Great  Britain  and  Holland 9,  19 

Fluctuating  rate  of  exchange 121 

Foreign  check — facsimile  of 151,  152 

Foreign  checks  or  drafts 150-152 


INDEX  231 

F — continued 

Foreign  commercial  bill  of  exchange 166-172 

Foreign  commercial  bill  of  exchange — buying  of 166,  189,  210 

Foreign  commercial  forms 139-177 

Foreign  discount  rates 119 

Foreign  drafts  against  shipments  abroad 171 

Foreign  drafts  and  checks 150-152 

Foreign  exchange — between  countries 3,  4 

Foreign  exchange  brokers 214 

Foreign  exchange  business — extent  of 1-4 

Foreign  exchange  centers 3 

Foreign  exchange  conversion  book 115 

Foreign  exchange — definition  of  the  term 1,4 

Foreign  exchange — how  exporters  are  interested — how  indebted- 
ness between  countries  is  paid 2,  3 

Foreign  exchange  jobbers 215-217 

Foreign  exchange  jobbers'  quotations 216-218 

Foreign  exchange — Margraff's  definition  of 4 

Foreign  exchange — newspaper  quotations  for 116-119 

Foreign  exchange — quotations  for 113-120 

Foreign  exchange — rate  of  exchange 121,  122 

Foreign  exchange  retailers'  profit  table 219 

Foreign  exchange  retailers'  profit  table — English 220 

Foreign  exchange  system 1-4 

Foreign  exchange — transactions  comprising  same 1 

Foreign  exchange — trade  between  countries 2,  3 

Foreign  limited  checks 162 

Foreign  money — conversion  of 75 

Foreign  money — value  of 6 

Foreign  postal  money  order. 163-165 

Foreign  postal  remittances 158-161 

Fractional  French  exchange  rates 201 

fractional  German  exchange  rates 204 

Fractional  Holland  exchange  rates 208 

Fractions  of  100  by  64ths — expressed  decimally 224 

Franc — see  money  of  France 10 

France — buying  bills  of  exchange  on 199-203 

France — money  of 10 

French  exchange  interest  tables 202 

French  checks  and  bills — dating  of 203 

French  exchange  quotations ' 116 

French  gold • 11 

French  Guiana — money  of 65 

French  money — examples  in  conversion  of 81-85 

French  stamp  taxes -_^— - 203 

Fuang — see  money  of  Siam ". 41 

Fun — see  money  of  China 34 

G 

Gambia — money  of 9 

Guadelupe — money  of 12 

Genoa  lire — quotations  for 119 

German  East  Africa — money  of 45 

German  exchange  interest  tables 205 

German  exchange  fractional  quotations 204 

German  exchange  quotations 91, 113 

( Icnnan  money — conversion  of 85-91 

German  stamp  taxes 206 

Germany — buying  bills  of  exchange  on 203-206 


232  FOREIGN  EXCHANGE  TEXT  BOOK 

G — continued 

Germany — money  of 18 

Gibralter — money  of g 

Gold 5 

Gold  and  silver  coins — value  of  in  other  countries 221-223 

Gold  bullion 69,  70 

Gold  Coast — money  of 9 

Gold  coins  or  bars 5 

Gold  coins  or  bullion 70 

Gold — coinage  of 70 

Gold  exporting  and  importing  points 124,  183 

Gold  monetary  units  of  countries 72,  73 

Gold — shipped  as  merchandise 192 

Gold  standard — adoption  of , .  71 

Gourde — see  money  of  Haiti 56 

Government  notes 5 

Great  Britain — buying  bills  of  exchange  on 194-199 

Great  Britain — money  of 7 

Great  Britain  exchange — conversion  of 75-80 

Great  Britain — table  of  weights  of  money 7 

Greece — money  of 10,  17 

Grecian  exchange — conversion  of 110 

Grecian  exchange  quotations 114 

Grenada — money  of 9 

Groat — see  money  of  Bermuda  Islands 55 

Guaranty — letter  of  credit 145 

Guaranty — travelers'  cheque .  .  , 155 

Guatemala  exchange — conversion  of 112 

Guatemala — money  of 54 

Guiana — money  of 12 

Guilder  or  gulden — see  money  of  Holland 19 

Guinea — see  money  of  Great  Britain 7 

Gulden  or  guilder — see  money  of  Holland 19 

H 

Haiti  — money  of 56 

Hawaii  (Islands) — money  of 46 

Heller — see  moi.ey  of  Austria-Hungary  and  German  East  Africa  21,  46 

Himalaya  States — money  of 60 

Holland — buying  bills  of  exchange  on 206-209 

Holland  exchange — conversion  of 94,  95 

Holland  exchange — fractional  quotations 208 

Holland  exchange  interest  tables 209 

Holland  exchange  quotations 116 

Holland — money  of 19 

Honduras  exchange — conversion  of 112 

Honduras — money  of 54 

Hong  Kong  exchange — conversion  of 98 

Hong  Kong  exchange  quotations 116 

Hong  Kong — money  of 9 

Holy  Land — money  of 31 

Hungary — see  Austria-Hungary 21 

Hypothecation  certificate 190,  210 


Imperial — see  money  of  Russia 

Importers  in  Germany 206 

Imports — value  of  in  1905 2 

In  case  of  need — meaning  of 184-192 


INDEX  233 

|  —  continued 

Indebtedness  between  countries  ..........................  ...  3 

India  —  money  of  ..........................................  32 

Indian  (British)  exchange  —  conversion  of  ....................  101,  102 

Indorsements  in  blank  ....................................  188 

Indorsements  in  full  .......................................  188 

Indorsements—  various  forms  of  ............................  187,  188 

Insurance  certificates  ....................................  170,  190 

Interest  tables  —  French  exchange  ..........................  202 

Interest  tables  —  German  exchange  ..........................  205 

Interest  tables  —  Holland  exchange  ..........................  209 

Interest  tables  —  sterling  exchange  ..........................  19 

Internal  revenue  stamp  taxes  —  France  .......................  203 

Internal  revenue  stamp  taxes  —  Germany  .....................  206 

Internal  revenue  stamp  taxes  —  Great  Britain  ................  196 

Invoice  of  foreign  shipment  ................................  172 

Ireland  —  money  of  ......................................    .  32 

Italian  exchange  —  conversion  of  ...........................  96,  97 

Italian  exchange  —  quotations  ..............................  113 

Italy  —  money  of  ...........................................  10,  114 

J 

Jamaica  exchange  —  conversion  of  ..........................  Ill 

Jamaica  —  money  of  ..................  ....................  9,  55 

Japanese  exchange  —  conversion  of  ...........................  99 

Japanese  exchange  —  quotations  ............................  116 

Japan  —  money  of  .........................................  37 

Jobbers  of  foreign  exchange  ...............................  215-217 

K 

Kopecks  —  see  money  of  Russia  .............................  22 

Korea  —  money  of  .........................................  69 

Korona  —  see  money  of  Austria-Hungary  .....................  21 

Kran  —  see  money  of  Persia  .................................  40 

Kreutzer  —  see  money  of  Austria-Hungary  ....................  21 

Krone  —  see  money  of  Norway,  Sweden,  Denmark  and  Austria- 

Hungary  .............................................  20,  21 


Labuan  —  money  of  ........................................  9 

Lagas  —  money  of  .........................    ...............  9 

Latin  Union  countries  ........................  .•  ............  10 

Lei  —  see  money  of  Roumania  ...............................  26 

Legal  tender  silver  ........................................  5 

Lepta  or  Lepton  —  see  money  of  Greece  ......................  17 

Letter  of  credit  —  circular  ...................................  139-146 

Letter  of  credit  —  circular  —  agreement  ........................  141,  146 

Letter  of  credit  —  circular  —  facsimile  of  .......................  142,  149 

Letter  of  credit  —  circular—  guaranty  .........................  141,  145 

Letter  of  credit  —  circular  —  used  with  letter  of  indication  .......  141,  146 

Letter  of  credit  —  commercial  ...............................  173-177 

Letter  of  credit  —  commercial  —  agreement  ....................  176 

Letter  of  credit  —  commercial  —  trust  receipt  ..................  177 

Letter  of  credit  —  why  drawn  on  London  .....................  7 

Letter  of  indication  ................................  .......  147-149 

Lev  —  see  money  of  Bulgaria  ................................  15 

Lew  —  see  money  of  Bulgaria  ..............................  15 

Li  —  see  money  of  China  ....................................  34 


234  FOREIGN  EXCHANGE  TEXT  BOOK 

L — continued 

Liang — see  money  of  China 34 

Libra — see  money  of  Peru 67 

Limited  checks — foreign 162 

London  exchange  quotations 120 

London — financial  center  of  the  world 7 

Lot — see  money  ot  Siam 41 

Luxemberg — money  of 69 

IY1 

Mace — see  money  of  China 34 

Madagascar — money  of 12,  46 

Malta — money  of 8,  9 

Manilla  exchange — conversion  of 100,  101 

Manilla  exchange — quotation 116 

Margraff's  International  Exchange 4,  225 

Mark — see  money  of  Germany 18 

Markkaa — see  money  of  Finland 24 

Martinique — money  of : 12,  59 

Maturity — meaning  of 184 

Mercantile  letter  of  credit .' 173 

Mexican  exchange — conversion  of 99,  100 

Mexican  exchange — quotations 116 

Mexico — money  of 49 

Milan  d'Or — see  money  of  Servia 28 

Milreis — see  nioney  of  Portugal  and  Brazil 25,  61 

Minor  coins 5,  6 

Mint — director  of 6 

Mint  par  of  exchange  between  United  States  and  other  countries  127-130 

Mint  par  of  exchange  between  Great  Britain  and  other  countries  131 

Mohur — see  money  of  British  India 33 

Monetary  systems  of  the  world 5 

Monetary  units — gold — of  countries 72,  73 

Money — conversion  of 75 

Money — exchanging  of 4 

Money — forms  of 5 

Money  of  foreign  countries 5 

Money  markets  of  the  world 119 

Money — value  of  in  other  countries 221-223 

Money  order — bank  post 165 

Money  order — express 218 

Money  order — foreign  postal 163-165 

Money  transferred  by  cable 157 

Montenegro — money  of. 69 

Montserrat — money  of 9 

N 

Natal  exchange — conversion  of 112 

Natal — money  of 8-9,  45 

Netherlands  (The)  exchange — conversion  of 94,  95 

Netherlands  (The) — money  of 19 

Nevis — money  of 9 

New  Foundland — money  of 52 

New  Guinea — money  of 9 

Newspaper  quotations  for  foreign  exchange 116-119 

New  York  exchange 125 

New  York  exchange — quotations  for 120 

New  Zealand  exchange — conversion  of Ill 

New  Zealand — money  of ,.  .  8,  46 


INDEX  235 

N  — continued 

Nicaragua  exchange — conversion  of 112 

Nicaragua — money  of 54 

Nominal  exchange 127 

No  protest — explanation  of 184 

Norway — money  of 20 

Norwegian  exchange — conversion  of 92 

Norwegian  exchange — quotations  for 116 

North  American  countries — money  of 47 

Noting — explanation  of 185 

o 

Obok — money  of 12 

Ochr-el-guerches— see  money  of  Egypt 43 

Onza — see  money  of  Guatemala,  etc.,  Bolivia  and  Cuba 54—58,  60 

Orange  Free  State  exchange — conversion  of 112 

Orange  Free  State — money  of 45 

Ore — see  money  of  Norway,  Sweden  and  Denmark 20 

Orient  (The) — money  of 45 

P 

Pacific  Ocean  Islands — money  of 46 

Panama  exchange — conversion  of 112 

Panama — money  of 53 

Papal  silver  coins — see  money  of  Italy 15 

Paper  money 5 

Paper  money — value  of 7 

Par  of  exchange — commercial 132,  133 

Par  of  exchange — in  the  United  States 133 

Para — see  money  of  SerVia  and  Turkey 28,  30 

Paraguay  exchange — conversion  of Ill 

Paraguay — money  of 65 

Paris  exchange — quotations  for 120 

Paris  francs — quotations  for 118 

Pars  of  exchange 127-132 

Pars  of  exchange — between  Great  Britain  and  other  countries.  .  131 

Pars  of  exchange — how  determined 127 

Parties  to  a  bill  of  exchange  and  their  responsibility 193 

Patacoe — see  money  of  Paraguay 67 

Payment  of  indebtedness  between  countries 3 

Pence — see  money  of  Great  Britain 7 

Penebat — see  money  of  Persia 40 

Penni — see  money  of  Finland 24 

Penny — see  money  of  Great  Britain 7 

Per  mille — meaning  of ._. 185 

Persia — money  of . , 7^r.~r7TrrT7 40 

Peru  exchange — conversion  of Ill 

Peru — money  of 66 

Peseta — see  money  of  Spain 29 

Peso — see  money  of  Philippines,  Zanzibar,  Mexico,  British  Hon- 
duras, Panama,  Guatemala,  Honduras,  Nicaragua,  Salva- 
dor, Cuba,  Argentine  Republic,  Chile,  Paraguay  and 
Uruguay.  (For  page  numbers  see  countries  named.) 

Pfennig — see  money  of  Germany 18 

Philippine  Islands  exchange — conversion  of 100,  101 

Philippine  Islands — money  of 42 

Piastre— see  money  of  Turkey — Indo-China  and  Egypt 30-39,  43 

Pice — see  money  of  British  India 32 

Pie — see  money  of  British  India 32 


236  FOREIGN  EXCHANGE  TEXT  BOOK 

P — continued 

Pitjes — see  money  of  China 34 

Porto  Rico — money  of 59 

Portugal — money  of 25 

Portuguese  exchange — conversion  of 105 

Portuguese  India — money  of 26 

Posted  rates 122 

Posted  rates — quotations 118 

Postal  money  order — foreign 163-165 

Postal  remittance — foreign 158-161 

Pound — Egyptian — see  money  of  Egypt 43 

Pound  sterling — see  money  of  Great  Britain 7 

Pound — Turkish — see  money  of  Turkey 30 

Private  discount  rates 191 

Profit — tables  for  retailers  of  foreign  exchange 219,  220 

Protest — explanation  of 185 

Purchasers'  agreement — letter  of  credit 146 

Q 

Qualified  indorsements 188 

Quotations  for  foreign  exchange 1 13-120 

Quotations — jobbers 215-217 

R 

Rate  of  exchange 121,  122 

Rate  of  exchange — causes  of  fluctuation 123-125 

Rate  of  exchange — establishing  of 122 

Rates  between  countries 121 

Rates  for  foreign  exchange — jobbers 216,  217 

Rates — meaning  of 71 

Real  exchange 127 

Real — see  money  of  Ecuador  and  Paraguay 64,  65 

Rebate  rates 190 

Rebate  rates — explanation  of 186 

Reichsmark — see  money  of  Germany 18 

Reimburse  bills- — bankers 192 

Reis — see  money  of  Portugal  and  Brazil 25,  61 

Restrictive  indorsements 188 

Retailers  of  foreign  exchange — profit  table 219 

Retailers  of  English  exchange — profit  table 220 

Reunion — money  of 46 

Rin — see  money  of  Japan 37 

Rising  rate  of  exchange 121,  122 

Rixdaler — see  money  of  Holland 1>J 

Roumanian  exchange — conversion  of 106,  107 

Roumanian  exchange— quotations 116 

Roumania — money  of 

Ruble — see  money  of  Russia 

Rupee — see  money  of  British  India,  Ceylon  and  German  East 

Africa 32-38,  45 

Russian  exchange — conversion  of 93 

Russian  exchange — quotations 113,  1 16 

Russia — money  of 

s 

Saint  Helena  Island — money  of '. 9,  55 

Saint  Lucia — money  of 

Saint  Petersburg  rubles — quotations  for 

Salvador  exchange — conversion  of 112 

Salvador — money  of 54 

Salung- — see  money  of  Siam 41 


INDEX  237 

S — continued 

Santo  Domingo — money  of 59 

Sapecks — see  money  of  Indo-China 39 

Scandinavian  exchange — conversion  of 92 

Scandinavian  exchange — quotations  for 113 

Scandinavian  Union — money  of 20 

Scotland — money  of 32 

Second  of  exchange 181,  183 

Seignorage — meaning  of '    79 

Selling  rates — meaning  of 187 

Sen — see  money  of  Japan 37 

Senegal — money  of 12 

Servian  exchange — conversion  of 108 

Servian  exchange — quotations  for 114 

Servia — money  of 28 

Shabis — see  money  of  Persia 40 

Shilling — see  money  of  Great  Britain 7 

Shoe — see  money  of  China 34 

Short  bills — meaning  of 187 

Siam — money  of 41 

Sierre  Leone — money  of 9,  45 

Sight  bills — meaning  of 187 

Silver  and  gold  coins — value  of  in  other  countries 221-223 

Silver  bullion 69 

Silver  coins 6 

Silver  coins — purchasing  power  of 6 

Silver  coins — value  of 6  7 

Sin — see  money  of  China 34 

Sixteen  to  one — coinage 69 

Sol — see  money  of  Peru 66 

South  African  Republic  exchange — conversion  of Ill 

South  African  Republic — money  of 45 

South  American  exchange — conversion  of Ill 

South  America— money  of 59 

South  American  exchange — quotation  for 116 

Sovereign — most  universally  recognized  coin 7 

Sovereign — see  money  of  Great  Britain 7 

Spain — money  of 29 

Spanish  exchange — conversion  of 107,  108 

Standard  bullion 69,  70 

Steady  exchange 117 

Sterling  exchange  interest  tables 197 

Sterling  exchange — meaning  of 187 

Sterling  quotations '.....  118 

Stockholm  kronors — quotations  for 119 

Stotinki — see  money  of  Bulgaria 15 

Straits  Settlements  exchange — conversion  of Ill 

Straits  Settlements — money  of 9 

Strong  exchange — meaning  of 117 

Subsidiary  silver 48 

Subsidiary  silver  coins 5 

Sucre — see  money  of  Peru 64 

Sweden — money  of 20 

Swedish  exchange — conversion  of 92 

Swedish  exchange — quotations 161 

Swiss  exchange — conversion  of 81 

Switzerland — buying  bills  of  exchange  on 201 

Switzerland — money  of 10,  13 

Sycee — see  money  of  China 34 

Syria — money  of 30,  3 1 


238  FOREIGN  EXCHANGE  TEXT  BOOK 


Table  for  figuring  profit  on  sales  foreign  exchange 219,  220 

Table  of  English  money 75 

Table  of  decimals  of  100  by  64ths 224 

Tael — see  money  of  China 34 

Tanga — see  money  of  Portuguese  India 26 

Tasmania  exchange — conversion  of Ill 

Tasmania — money  of 46 

Term  foreign  exchange 1 

Terms  and  expressions  used  in  foreign  exchange  transactions.  .  179-187 

Thaler — see  money  of  Germany  and  Austria-Hungary 18,  21 

Third  of  exchange 183 

Through  bill  of  lading 169 

Tical — see  money  of  Siam 41 

Tobago — money  of 9 

Toman — see  money  of  Persia 40 

Tourists — see  French  silver  coins 11 

Tourists — see  travelers'  guide 221-223 

Trade  between  countries 3 

Trade  centers 3 

Trade  with  foreign  countries 2,  3 

Transfer  of  money  by  cable 157 

Transvaal  exchange — conversion  of 112 

Transvaal — money  of 9,  45 

Travelers'  cheques 153-156 

Travelers'  cheque — facsimile  of 154 

Travelers'  cheque — guaranty 153,  155 

Travelers'  cheques — collateral  security  contract 153,  156 

Travelers'  guide — value  of  money  in  other  countries 221-223 

Trinidad — money  of 9 

Tristan — money  of 9 

Trust  receipt — commercial  letter  of  credit 177 

Tsein — see  money  of  China 34 

Tunis — money  of 12,  46 

Turkey — money  of 30 

Turkish  exchange — conversion  of 1 10,  1 1 1 

Turkish  exchange — quotations  for 116 

Turks  Island — money  of 9 

u 

United  States — money  of 47 

Units  of  money  of  countries — gold 72,  73 

Uraguay  exchange — conversion  of Ill 

Uruguay — money  of 67 

Usuance — meaning  of 187 

V 

Value  of  foreign  coins  as  declared  by  the  director  of  the  United 

States  mint 6,  127-130 

Value  of  foreign  money 6 

Value  of  gold  and  silver  coins  in  other  countries 221-223 

Value  of  standard  gold  coins  and  bullion 70 

Venezuela  exchange — conversion  of .. Ill 

Venezuela — money  of 68 

Vienna  kronen — quotations  for 119 

Virgin  Islands — money  of 9 


INDEX  239 

W 

Wales — money  of 32 

Waving  protest — meaning  of 188 

Weak  exchange 117 

Weights  of  coins  of  the  United  States 49 

West  Indies  Islands — money  of 55 

With  exchange — meaning  of 187 

Without  exchange — meaning  of 187 

Y 

Yen — see  money  of  Japan 37 

Yenliang — see  money  of  China 34 

Yentzu — see  money  of  China 34 

Z 

Zanzibar — money  of • 46 

Zurich  francs — quotations  for 119 


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Figuring  Book 


A  PUBLICATION  containing  tables  convert- 
ing foreign  money  into   United  States  money 
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A  New  Figuring  Book 

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French,   Belgian  and   Swiss 

EXCHANGE  FIGURING  TABLES 


By  H.   K.   BROOKS,  Chicago,  Ills.,  U.  S.  A. 


Tables  converting  French,  Belgian  and  Swiss  money 
into  United  States  money  and  United  States  money 
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Also  Tables  converting  French,  Belgian, 
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